Short answer
Construction loans fund a build (ground-up or substantial rehab) under formal draw process with inspector oversight and completion guarantee . Acquisition bridge funds the purchase of existing income-producing assets needing reposition or stabilization. The documents, draw mechanics, and risk profile differ materially.
How does the draw process differ?
Construction draws follow line-item budget completion with lien waivers, inspector sign-off, and percentage-of-completion calculations. Bridge funding (initial draw plus future-funding facility) flows on a simpler basis, typically requisitions tied to capital expenditure milestones, with less third-party verification overhead.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1
- Quarterly Banking Profile · Federal Deposit Insurance Corporation · 2026-Q1