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 Maryland both are taxed the same way: 12-108(e) attaches recordation tax to the extent unpaid outstanding principal debt is increased, 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.)
Elsewhere, state law can remove the choice: Texas caps homestead liens at 80% CLTV and bars a subordinate equity line. Maryland does not restrict the lien; it taxes it.
Neither preserves the Maryland homestead cap, since 9-105 turns on occupancy and transfer, not on liens.

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 Maryland they also 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 Maryland, the tax treatment is the same

Md. Tax-Property 12-108(e) subjects a supplemental instrument of writing to recordation tax to the extent that actual consideration is payable on it, or the amount of unpaid outstanding principal debt is increased by it. That language is product-neutral. A bridge loan and an equity line that each add the same principal produce the same taxable increase.

The refinancing exemption in 12-108(g) does not rescue either, because it reaches only the unpaid principal of an existing mortgage being refinanced, by the original mortgagor. Neither product is that. See the recordation tax page.

So in Maryland the choice between them is not a tax choice. It is a timing choice.

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. So: if a HELOC is your plan, open it early. If you are already mid-move, a bridge or another structure is more realistic.

How other states differ

Worth knowing if you are comparing advice written for another market. 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, which removes the option. Maryland takes the opposite approach: it does not restrict the lien, it taxes the increase.

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
Maryland recordation tax	On the increase in principal	On the increase in principal
Available in Texas	Subject to the 80% homestead cap	Subordinate lines prohibited
Keeps the Maryland homestead cap	No	No

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 Maryland?

In Maryland the tax treatment is the same for both, because Md. Tax-Property 12-108(e) attaches recordation tax to the increase in unpaid outstanding principal debt regardless of product. 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 Maryland restrict how much I can borrow against my home?

Maryland does not cap homestead liens the way Texas does under Article XVI Section 50(a)(6), which limits all homestead liens to 80% combined loan-to-value and prohibits a subordinate equity line. Maryland permits the lien and taxes the increase in principal instead.

Does borrowing against my Maryland home affect the Homestead Tax Credit?

No. Md. Tax-Property 9-105 turns on the homeowner's occupancy and on transfers for consideration, not on liens. The credit is lost when you buy a new home or when the departing home stops being your occupied principal residence, not because you borrowed against it.

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. Maryland recordation tax rates are set by each county and Baltimore City, and the Homestead Tax Credit is administered by the State Department of Assessments and Taxation; your county finance office, your CPA or a Maryland attorney, and your real estate agent each handle their own part. Loans are subject to borrower and property qualification.