$3,000,000 Refinance in Rancho Mirage, CA
D-I-P Loan Deal Breakdown: $3 Million Short Term Bridge Loan in Rancho Mirage, California
Loan Amount: $3,000,000
Loan Term: 9 Months
LTV: 60%
Lien Position: 1st Deed of Trust
Rubicon Mortgage Fund, LLC recently closed a $3 million DIP loan in Rancho Mirage, California, supporting a repeat borrower with the refinance of a completed luxury spec home in the Greater Palm Springs area.
This transaction highlights how debtor in possession financing can be an effective solution when legal complexities exist and timing is critical.
What Is a DIP Loan
A DIP loan, or debtor in possession loan, is a form of court approved financing available to borrowers involved in bankruptcy proceedings. These loans are unique because they can grant the lender a super priority position, meaning the loan is given priority over existing debt.
For lenders, this structure can be attractive when the collateral strongly supports the loan amount and when the court authorizes the financing. For borrowers, a DIP loan can provide critical liquidity, stabilize a project, and create time to execute an exit strategy.
Rancho Mirage Property Overview
The collateral for this DIP loan is a completed custom spec home located in Rancho Mirage, within the highly desirable Greater Palm Springs area. The property is a non owner occupied investment property and was built as a luxury residence intended for resale.
Key property details include:
- Single family residence
- 6 bedrooms and 8 bathrooms
- Approximately 6,750 square feet
- Situated on a private 0.98 acre lot
- South facing with panoramic mountain views
- Custom built with high end finishes throughout
The home is located in a prime Rancho Mirage location, making it well positioned for sale once market timing aligns.
Loan Structure and Terms
This transaction was structured as a short-term bridge loan with a nine month term. The loan amount was $3 million, and the purpose was to refinance and pay off an existing construction loan that had reached maturity.
The borrower is a repeat client with whom Rubicon Mortgage Fund, LLC has closed multiple transactions. That existing relationship, combined with the quality of the collateral and court approved DIP structure, allowed for an efficient execution.
This DIP loan provided the borrower with immediate relief from default interest while preserving equity and giving them the runway needed to sell the property.
Why DIP Financing Made Sense for This Deal
Occasionally, when legal matters are involved, lenders have the opportunity to achieve a super priority position through a DIP loan. In situations where the collateral supports the loan amount, this structure can be favorable for both parties.
In this scenario, the property was already completed, located in a strong market, and designed as a high-end spec home. With court cooperation, Rubicon Mortgage Fund, LLC was able to step in, refinance the existing obligation, and create a clear path forward.
Exit Strategy
DIP Loans With Rubicon Mortgage Fund, LLC
This transaction demonstrates how DIP loans can be a powerful tool when traditional financing is not an option and timing is critical. Rubicon Mortgage Fund, LLC specializes in short term bridge loans secured by high quality real estate across California, including complex scenarios that require speed, flexibility, and experience.
For borrowers and brokers navigating bankruptcy or time sensitive situations, a properly structured DIP loan can provide stability and a clear path to resolution.
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