Private lending is the path for situations where institutional floating home financing doesn't fit. When Bank of Marin and a second lender Paul works with directly can't accommodate your situation — for whatever reason — private lending through Paul's network may be the answer. Here's how it works and when to consider it.
What Is Private Lending?
Private lending means borrowing from an individual, family office, private fund, or other non-institutional source rather than from an institutional lender. Private lenders set their own terms, evaluate collateral on a case-by-case basis, and can fund deals that institutional lenders won't touch.
In floating home finance, private lending typically comes in the form of bridge loans (short-term, 1–3 years) or gap financing. It's not a first-stop option — it's what Paul arranges when the institutional path isn't available for your specific situation.
When Private Lending Makes Sense
- Speed: Private lenders can close in days or weeks, not months. If you need speed — a competitive offer situation, a seller who won't wait — a private bridge loan funded quickly followed by permanent refinancing later can win the deal.
- Credit challenges: If you have a recent credit event (bankruptcy, foreclosure, short sale) that disqualifies you from institutional lending, private lenders may work with you — at higher rates and with larger equity requirements.
- Complex income: Self-employed borrowers with complex tax returns sometimes struggle with institutional income documentation. Private lenders can evaluate income differently.
- Unusual property: Some floating homes — older hulls, unusual construction, very short lease terms — don't meet institutional lender guidelines but still represent genuine value. A private lender can evaluate the whole picture.
- Maturing short-term loan: If you have a loan coming due and can't immediately refinance into permanent financing, a bridge loan buys time.
The Terms of Private Lending
Private loans are more expensive than institutional loans — that's the trade-off for flexibility and speed.
- Rates: Typically 9%–14%+ depending on risk profile and lender
- Terms: Usually 1–3 years, interest-only or with balloon payments
- LTV: Usually 60–70% (30–40% down or equity)
- Origination fees: 1–3 points (1%–3% of loan amount)
- Prepayment: Often no prepayment penalty, which allows refinancing to permanent financing when available
The Bridge-to-Permanent Strategy
Paul frequently arranges private bridge loans for floating home buyers who need to close quickly or don't yet qualify for institutional financing. The bridge gets you into the home; then, once you've resolved the disqualifying factor (credit seasoning, income documentation, property improvements), Paul refinances you into a long-term marine or portfolio loan. Because he handles both the bridge and the refinance, the transition is planned from day one.
Risks and Considerations
Private lending is appropriate for the right situation but should be approached carefully:
- Higher rates and costs mean you're paying more to own the home during the bridge period
- Short terms mean you must have a clear plan for refinancing or paying off the loan
- Some private lenders are not well-established — working through a broker who knows and has worked with the lending source is important
How to Access Private Lending
Private floating home lending doesn't happen through online applications. It happens through relationships. When Bank of Marin or the second lender can't accommodate your situation, Paul can reach into a network of private lending sources developed over 40 years in the market — individuals and funds that have funded Sausalito floating home transactions before and know exactly what they're evaluating. Call Paul at (415) 332-7539 and explain your situation honestly. If private lending is the right path, he'll tell you.
Ready to talk financing?
Paul Bergeron is the only Sausalito broker who handles both the home and the loan. Call (415) 332-7539 or reach out below.