Bridge Loan or Home Equity Line?

Key takeaways

Both reach the same equity. A bridge loan is structured around the sale as its exit; a home equity line is revolving and open-ended. (Fannie Mae B3-3.8-05, dated 09/02/2026.)
In Minnesota both are taxed the same way: the registry tax applies at 0.0023 of the debt being secured when the mortgage is recorded, regardless of product.
A HELOC generally needs to be open before you are carrying two mortgages, because qualifying gets harder once the second payment exists. (Fannie B3-3.8-05, 09/02/2026, governs the departing payment on agency files.)
A bridge loan is underwritten with the overlap in view, which is why it tolerates a two-payment picture a HELOC application often will not. (Fannie Mae B3-3.8-05, dated 09/02/2026.)
State law can remove the choice. Texas caps all homestead liens at 80% CLTV and prohibits a subordinate home equity line under Tex. Const. art. XVI, 50(a)(6).
Minnesota has no constitutional cap of that kind. It permits the lien and taxes the recording instead. (MN Dept of Revenue, read 2026-09-24.)

Program and regulatory figures verified September 25, 2026. Details change; confirm your scenario with us.

By Mike Certo, Cornerstone First Mortgage · NMLS #260555 · Updated September 25, 2026

These two reach the same equity and behave differently under pressure. In Minnesota they share a tax treatment, which narrows the comparison to timing.

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The structural difference

A home equity line is revolving credit secured by your home, generally with a draw period, designed to sit there and be used over years. A bridge loan is designed to be repaid once, from a specific event, soon: the sale of the departing home.

A HELOC lender is underwriting a long relationship with your current property; a bridge lender is underwriting a transition.

In Minnesota the tax treatment is the same

The mortgage registry tax applies at 0.0023 of the debt being secured when a mortgage is recorded, with 0.0001 added in Hennepin and Ramsey, and the Department of Revenue states the mortgagor is liable. That language is about recording a mortgage, not about which product it is.

So a bridge loan and an equity line securing the same debt produce the same tax. The choice between them is not a tax choice in Minnesota; it is a timing choice. See the mortgage registry tax page.

Timing decides it

A HELOC is easiest to obtain while you have one mortgage and clean ratios. Once you are under contract on a second home, or already carrying two payments, qualifying for a new line against the departing property gets substantially harder.

A bridge loan is built for that moment. If a HELOC is your plan, open it early. If you are already mid-move, a bridge or one of the other structures is more realistic.

Where the state removes the choice

Texas caps all liens against a homestead at 80% combined loan-to-value under Article XVI Section 50(a)(6) of its constitution and prohibits a subordinate home equity line outright. Minnesota takes a different approach: it permits the lien and taxes the recording.

Side by side

	Bridge loan	Home equity line
Exit	The sale of the departing home	Open-ended, revolving
Best obtained	During the move	Before the move begins
Tolerates two payments at application	Built for it	Often not
Minnesota registry tax	0.0023 of the debt secured	0.0023 of the debt secured
Available in Texas	Subject to the 80% homestead cap	Subordinate lines prohibited

The full set of options is on the structures page, and the basics on how a bridge loan works.

Frequently asked questions

Is a bridge loan or a HELOC better for buying before selling in Minnesota?

In Minnesota the tax treatment is the same for both, because the mortgage registry tax applies at 0.0023 of the debt being secured when any mortgage is recorded. So the decision comes down to timing: an equity line is easiest to obtain before you carry two mortgages, while a bridge loan is underwritten with the overlap in view.

Does Minnesota restrict how much I can borrow against my home?

Minnesota has no constitutional cap of the kind Texas imposes under Article XVI Section 50(a)(6), which limits all homestead liens to 80% combined loan-to-value and prohibits a subordinate equity line. Minnesota permits the lien and taxes the recording instead.

Who pays the Minnesota mortgage registry tax on a HELOC?

The borrower. The Department of Revenue states that the mortgagor is the person liable for the tax, which is imposed on the recording of a mortgage, and that applies regardless of which product secures the debt.

Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal, tax, or real estate advice. Minnesota mortgage registry tax and deed tax are administered by the Minnesota Department of Revenue and exemptions depend on your facts; your closing agent, your CPA or a Minnesota attorney, and your real estate agent each handle their own part. Loans are subject to borrower and property qualification.