I own 3.46 acres at 6220 E Southport Rd (Parcel 3003200). The title is clear except for one disputed city cleanup lien from a 2025 code enforcement action. That lien is being contested in federal court, with a preliminary injunction motion pending to vacate or stay it. No other encumbrances.
I’m looking for a small bridge loan of $45,000 to $50,000 (interest-only, 6-month term, balloon at maturity) to cover a recent tax delinquency and property prep ahead of resolution. My exit is lien vacatur through the federal case or settlement, followed by sale or refinance.
Can you lend on a property with a disputed junior cleanup lien in active federal litigation? What are your typical rates, points, LTV, and closing timeline for this scenario? Do you require payoff of the lien at closing, or can it be subordinated?
I can email the property details, federal case info, and treasurer notice right away. Who should I send them to for a quick pre-approval quote?"
Lender · Toledo, OH · Member since 2015 · 1k+ posts · 96 votes
7mo
Philip — this is a nuanced situation.
Active municipal liens combined with pending federal litigation will limit traditional hard money options, especially if taxes are delinquent.
That said, smaller asset-based bridge capital can sometimes work depending on:
• Current land value vs requested LTV • Whether the cleanup lien is senior or junior to new debt • Treasurer payoff amount • Exit timeline realism (court timing vs 6-month maturity)
If the numbers support a conservative position, there may be a path without requiring full lien payoff at closing — but it would be structured carefully.
Happy to take a look at the parcel details and case summary.
Shoot me a DM and we’ll see if it fits one of my capital partners.
a asset based bridge loan was my first thought, a conservative valuation on the property is $325k+ the cleanup lien can be easily subordinated to new lien would prefer not to pay it at closing as there is a very high probability that it is going to be vacated within the next 2 to 3 months, so paying it now would just be throwing away a pretty big chunk of cash. the treasurer payoff amount is $8200 but that is including the spring tax bill coming up, I have already notified the treasurer of the pending injunction, and they have set the city lien aside. not relying on court settlement timing for exit, at the 6 month mark property will either be sold, paid off or in the initial stages of a residential development.
If you would like to discuss options, feel free to give me a call at 317-719-6220 or email at [email protected]