Bridge Loan or Home Equity Line: The Michigan Comparison
Program and regulatory figures verified September 19, 2026. Details change; confirm your scenario with us.
In Michigan the interesting question is not which loan. It is whether you keep the old house for sale, and both loan options leave that answer intact.
Both routes preserve the exemption
MCL 211.7cc(5) conditions the conditional rescission on the previous home being not occupied, for sale, not leased and not used for any business or commercial purpose.
Recording a deed of trust against it breaches none of those. The house remains vacant, remains listed, has no tenant and is not being run as a business. So a bridge loan and a home equity line are equally safe from the exemption's point of view, and so is a cash-out refinance.
We spell this out because owners sometimes assume that borrowing against a property they are trying to sell will complicate its tax status. In Michigan it does not. The thing that complicates it is a tenant.
What decides it instead
The overlap, and Michigan's are the shortest we measure. Grand Rapids 22 days, Lansing 25, Muskegon 27, Detroit and Ann Arbor 32, Traverse City 41 as of August 2026.
At those timelines a defined term loan sized to a known gap is easy to justify, because the sale date it depends on is predictable. A line's open-ended flexibility is worth less when the expected wait is three to six weeks.
| Situation | Usually favors |
|---|---|
| Income carries both payments | Neither; carry and recast, and keep the exemption |
| Income close, equity strong, West Michigan timeline | Term financing sized to the gap |
| Timeline genuinely uncertain, or a thinner market | A line, sized honestly |
| You are prepared to give up the exemption for cash flow | Rental conversion, priced with that cost included |
The rest of the comparison
Term financing gives a fixed obligation and a defined payoff. A line gives flexibility and interest only on what is drawn. Both add an obligation measured in your debt ratio while you still hold the first mortgage, and neither creates income.
If the two-payment test fails badly, more borrowing makes the ratio worse. See the qualifying page.
The option that avoids the question
If income supports both payments, carrying both and recasting after the sale records nothing and costs nothing in financing. In a state where Grand Rapids clears in 22 days, that is realistic far more often than elsewhere, and it keeps the departing home in exactly the condition the rescission requires.
Compare all three on the structures page.
Frequently asked questions
Does a bridge loan break Michigan's conditional rescission?
No. MCL 211.7cc(5) requires the previous home to be not occupied, for sale, not leased and not used for any business or commercial purpose. Recording a lien against it breaches none of those conditions.
Should I use a bridge loan or a HELOC in Michigan?
Because neither affects the exemption, the decision turns on your timeline. With marketing times of 22 to 41 days across Michigan metros, a term loan sized to a defined gap is usually easy to justify; a line's flexibility is worth more only where the timeline is genuinely uncertain.
What is the cheapest way to buy before selling in Michigan?
Carrying both payments and recasting after the sale, where income supports it. It adds no financing cost and keeps the departing home vacant and listed, which is exactly what the conditional rescission requires.
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. Principal residence exemption eligibility and conditional rescission rules depend on your facts; your local assessor, your CPA or a Michigan attorney, and your real estate agent each handle their own part. Loans are subject to borrower and property qualification.