February, as the shortest month of the year, can be deceptive. On the surface, loan volumes were slightly up from January, but still fell short of the record highs we saw last October and December.
However, February set a record of its own. With 314 loans per business day, we saw the most activity ever on Lightning Docs. For reference, only one other month — December 2025, with 302 loans per business day — has broken the 300 mark. Bridge loans are once again showing year-over-year growth, while DSCR growth continues its strong trajectory.
Bridge Loan Volumes Rebound from January Lull
Bridge lending remains an up-and-down market. After a January that showed almost zero year-over-year (YoY) growth across 216 companies, February bounced back with 9% growth over the prior year. Lately it has seemed that every time bridge lending flattens out, it follows with a rebound month. If March brings a second consecutive month of growth, that would be an encouraging sign. However, market sentiment remains bearish as interest rates continue to fall and volumes remain muted.
We’ve come to expect decreasing average interest rates for bridge loans each month, but the 17-basis-point drop in February is by far the largest decrease we’ve seen in the past year. It appears we’re soon headed for a sub-10% average, while the median interest rate is already there at 9.90%.
After six months of the average loan amount oscillating up and down, February brought a second consecutive increase. At just under $712,000, the average loan amount still sits squarely within the range we’ve seen since mid-2025.
Interest Rate Descent Triggers Distribution Shift for Bridge Loans
The distribution of bridge loan interest rates continues to skew lower as the average drops. 56% of all bridge loans are now priced below 10%, and 39% fall in the 9–9.99% range. Another 2.5% of loans nationally have shifted below 9%, for a total of 17.5% across 2,597 bridge transactions in February.
Top 10 Bridge States Shuffle Places
With two months of data now in for the year, we’re seeing more movement among the top 10 states for bridge lending. Texas has overtaken Florida for the number two spot. Ohio made the biggest jump, rising five places to number four, while New York climbed four spots to enter the list. Washington, which has bounced between 10th and 11th, appears poised to become a regular presence on the list.
Surprise Entry in Top 10 Bridge Counties
Looking at the counties driving the most volume, it’s no surprise to see Los Angeles and San Diego at the top. Cook County, IL has long held the number three spot behind those two, but that changed last month when Dallas and Miami-Dade both passed it. Another surprise is Cuyahoga County appearing in the top 10 for bridge lending — while it typically leads the nation in DSCR transactions, it finished 2025 as only the 21st largest bridge lending market.
DSCR Volumes Maintain Momentum
Even with the shorter month, DSCR volume remained above 3,000 loans in February, coming from the same 49 users who have been active on Lightning Docs for DSCR since the start of 2025. March was around the time DSCR lending really took off last year, and next month may again give us a clearer signal of whether we can expect a similar surge in 2026.
DSCR Loan Rates and Amounts Approach Rarely Seen Lows
DSCR interest rates and loan amounts are both nearing thresholds we haven’t seen in some time. Average interest rates dropped three basis points to 7.01%, meaning another decline next month would likely push the national average below 7% for the first time in nearly four years. With an average loan amount of $301,266, DSCR loans are also approaching the $300,000 mark — a level not seen since February 2025.
Interest Rate Distribution Remains Aggregated for DSCR Loans
The distribution of DSCR rates remains tight, with 92% of all loans between 6–8%. We’ll continue watching the sub-6% segment, which remains small at just under 2%, but is growing quickly from 0.7% in January.
National Interest Rate Comparison: Dips Across the Board
February also brought declines across the broader rate environment. Along with decreases in average bridge and DSCR interest rates, consumer mortgage rates fell by five basis points and are now close to dipping back below 6%. After two months of increases, the 10-year Treasury yield dropped eight basis points in February. Spreads between it and DSCR loans remain tight at 2.88%.
Top 10 DSCR States See Stable Volume
Unlike bridge lending, the top states for DSCR lending have remained largely consistent with 2025. The biggest change so far is Maryland, which jumped four spots to enter the list at #8, while Illinois dropped out of the top 10 to #13.
Baltimore City Bursts into Top 10 DSCR Counties
As with bridge lending, Cook County, IL has had a slow start to the year in DSCR as well — the county fell from #3 to #6 on the list. Meanwhile, Baltimore City, MD surged to #4, helping drive Maryland’s rise into the top 10 states. To put that jump into perspective, at this time last year Baltimore City had recorded just 30 total DSCR loans. Today, it has more than quadrupled that output year-over-year.
A Look Back on February 2026
Overall, the early months of 2026 are continuing many of the trends that defined 2025. DSCR lending remains a strong growth opportunity for lenders, with new markets emerging and expanding quickly. At the same time, bridge lending continues to move in cycles, with periods of flattening followed by renewed growth. February’s rebound may be the start of another upswing, and March should give us a clearer indication of whether that momentum is building.
Nema Daghbandan, Esq.
Founder and Chief Executive Officer of Lightning Docs
Lightning Docs is a proprietary cloud-based software which produces business purpose mortgage loan documents nationally. As a Real Estate Finance Attorney and Partner at Fortra Law, the nation’s largest private lending law firm, Mr. Daghbandan has unique expertise in understanding the needs of private mortgage lenders. Mr. Daghbandan has been recognized by his peers in the legal community as a Super Lawyers® Rising Star from 2016-2022. Only 2.5% of attorneys receive this distinction. He also received a perfect 10/10 rating from attorney review site AVVO®.
