The Quick Read: No single rulebook sets a hard money credit minimum, so each private lender sets its own. Your score matters at two moments: when you get the loan, and when the note comes due and a new lender pulls your credit again.
- Hard money is underwritten mostly to the property, the rehab plan, and the exit. Credit is one input, not the whole decision.
- Across Lendmire’s wholesale network, hard money programs typically start at a 620 score, with added conditions below 660. This varies by lender, property, and experience.
- The score that got you the bridge loan does not carry over to the takeout loan. A new lender pulls a fresh report and applies its own floor and pricing tiers.
- Plan the exit, and protect your score, before you close the short-term loan.
Is There a Standard Credit Score for Hard Money?
There is no standard score. Hard money lenders are private, asset-based lenders, and each one writes its own overlays. An overlay is an extra rule a lender adds on top of its base program, such as a higher minimum score for first-time borrowers.
What this loan actually costs to carry.
Hard money is sized against the project and priced by time. Enter the deal and see how much the program will lend, the cash required at closing, the carry while you hold it, and what is left at the exit.
Leverage tiers on the current program: 85% with fewer than 2, 90% with 2 or more, 93% with 5 or more completed projects — every tier capped at 75% of after-repair value. Loan amounts up to $5,000,000, larger by exception; terms of 6 to 18 months, interest-only, no prepayment penalty. The rehab portion funds in draws against completed work, not at closing.
Program parameters shown update from Lendmire’s centralized guideline source. Rate, points, and months are editable assumptions, not quoted terms.
Cost cap sets the loan · positive spread
Illustrative estimate only — not a quote, Loan Estimate, approval, or commitment to lend. Rate, points, and months are editable assumptions. Hard money is business-purpose financing for real estate investors, not a consumer mortgage. Leverage on the current program tops out at 93% of project cost for investors with a documented track record, capped at 75% of after-repair value, with rehab funding up to 100% of the documented budget released in draws; actual terms vary by lender, borrower experience, property, and exit. Lendmire is a mortgage broker, not a lender.
Investopedia’s hard money loan overview describes the category as asset-based underwriting with short terms and higher costs than bank loans. The property is the collateral, so the lender cares first about what it is worth and whether the plan makes sense.
That does not mean credit is ignored. The claim that hard money lenders do not check credit is a myth, and it usually comes from lender marketing. Most lenders pull credit on the people who personally guarantee the loan. They want to see that you pay what you owe, and they use the score to set leverage and terms.
Think of it as a weighting question. A strong deal can carry a mediocre score, and a strong score cannot rescue a weak deal.
What Your Score Does on Closing Day
On closing day, your score mostly sets eligibility and how much of the project the lender will fund. First-time flippers feel this more than experienced ones, because there is no track record to offset it.
Here is how the network’s hard money program looks, and it varies by lender, property, and experience. The minimum score is 620, with additional conditions below 660. First-time investors qualify at the lower leverage tiers. Fix-and-flip leverage is measured against project cost, not purchase price, and it steps up with documented completed projects:
| Experience | Funding (of project cost) | Hard cap |
|---|---|---|
| Fewer than 2 projects | Up to 85% | 75% of after-repair value |
| 2+ projects | Up to 90% | 75% of after-repair value |
| 5+ projects | Up to 93% | 75% of after-repair value |
The rehab budget itself can fund up to 100% in draws against completed work. That is a budget figure, not a purchase loan-to-value. Terms run 6 to 18 months, interest-only, with no prepayment penalty. Nothing here is a commitment to lend.
A lower score does not change the tier table by itself. It changes what conditions a lender attaches and how much cash you bring. Lenders also read old and recent problems differently. A late payment last quarter says more about you today than an old item that has since been cleaned up.
Why the Note’s Due Date Is the Real Credit Test
Your note has a due date because hard money is built as a balloon loan. You pay interest during the term, then owe the full unpaid principal at once at maturity. Motley Fool’s balloon payment explainer covers the basic structure and the risk it creates.
The CFPB’s explanation of balloon payments makes the same point: shorter terms, then a large final payment. For a flipper, that final payment has to come from somewhere.
There are four ways to pay it:
- Sell the property.
- Refinance into long-term financing.
- Pay it off with other funds.
- Ask the lender for an extension.
Only the sale route skips a new credit review. Every other path puts your score in front of someone. That includes an extension, since the lender will look at how you handled the loan.
Many investors refinance out of hard money into long-term DSCR financing once the property is stabilized, and Lendmire brokers that path. A DSCR loan is a loan where qualification rests primarily on property-level rental income covering the payment, subject to lender guidelines. These loans are built for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage.
Here is the catch. Property-based does not mean credit-blind. The new lender still pulls your personal credit, applies a score floor, and prices the loan by score tier. Your credit gets a second exam, and it is often stricter than the first.
Step by Step: Credit and the Exit
This is the sequence a first-time flipper should run, starting well before the maturity date.
1. Read the note. Find the maturity date, any extension terms, and how the balloon is stated. Terms vary by lender.
2. Check your credit position. Pull your own reports and look at your middle score, because pricing tiers usually key off the middle of three scores. Many programs step pricing in bands of about 20 points.
3. Pick the exit. Decide between sale, refinance, or paying off with other funds. Keep an extension as a backup, not the plan.
4. Run the DSCR tests for a refinance exit. The lender wants a full appraisal and a rent schedule. The agency forms are named in Fannie Mae’s appraisal forms reference: a 1004 for a single-family home, a 1007 rent schedule for the market rent, and a 1025 for two- to four-unit properties. These names are for orientation only. DSCR loans follow the wholesale lender’s own rules, not agency guidelines.
5. Request a payoff statement. Get one with a good-through date from your hard money lender, and start the appraisal and payoff steps early.
6. Close the takeout. The new loan pays off the hard money lien and releases it.
Four things decide how this goes: the guarantor’s score band, the property’s value and rent, the maturity date, and the extension terms in your note.
Credit Across the Life of the Loan
Most flippers think of credit as a one-time gate. It is really a sequence, and the timeline is where first-timers get hurt.
| Stage | What gets checked | What can go wrong |
|---|---|---|
| Application | Guarantor score, experience tier | Higher conditions below 660 |
| Rehab hold | Nothing, unless you request a change | New debt or late payments lower your score |
| Pre-maturity | Your own self-check | Score has slipped below the takeout floor |
| Takeout | Fresh pull, rent schedule, appraisal | Lower tier, higher pricing, or a decline |
| Payoff | Lien release | Past-maturity default terms apply |
The long stretch in the middle is the danger zone. Nobody is watching your credit during the rehab, but life is. A contractor change order gets put on a card, utilization climbs, and the score slides without any lender action.
What a DSCR Exit Lender Wants From Your Credit
A DSCR exit lender wants a score above its floor, enough equity, and rent that covers the payment. Your score affects the second and third tests through leverage and pricing.
Here is how the network looks, subject to lender guidelines. A 620 floor exists in parts of the network, most programs want around 660, and 700+ unlocks the strongest leverage tiers. Purchase leverage mostly lands at 75% to 80% LTV on an investment property. High-leverage programs reach 85% LTV with roughly a 700+ score. A cash-out refinance tops out around 75% LTV on an investment property, and about 6 months of seasoning is the common expectation. Seasoning is the waiting period a lender wants after you buy before it will refinance.
Compare the two floors. A 620 can clear hard money and also exist on the DSCR side, but the conditions and pricing at each tier differ. A flipper who cleared the first loan at a lower score can still miss the takeout lender’s best tier. The reverse can happen too.
Coverage is the other half. The DSCR is the property’s monthly rent divided by its monthly payment of principal, interest, taxes, insurance, and any HOA dues, which lenders call PITIA. Coverage of 1.00 is where many select programs start. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. Stronger ratios open better pricing and leverage. See the complete DSCR loans guide for how the ratio works.
Clearing 1.00 does not mean the property produces positive cash flow. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation.
Reserves vary by lender, leverage, loan size, and transaction type, commonly around 6 months of PITIA. Plan to show liquid cash after the payoff, not just equity on paper.
A Worked Example
Say a first-time flipper closes a hard money loan in the network’s lower leverage tier, funded at up to 85% of project cost and capped at 75% of after-repair value. The guarantor’s score at application is in the mid-660s. These are modeled assumptions, not market data.
During the rehab, two things happen. The budget runs over, and the flipper puts the difference on credit cards. Utilization climbs, and the score slips into the mid-640s.
Now the note comes due. The property is finished and appraises well. The rent schedule supports coverage of roughly 1.1x. On paper this looks like a clean DSCR refinance.
But most programs want a score near 660, and the flipper is now under that line. Options narrow to a program with a 620 floor, which may carry weaker leverage and pricing. The flipper could also pay down card balances and wait for the score to recover, which means asking for an extension.
Now run the better version. The flipper pays the overrun from a cash reserve and keeps balances low. The score holds steady through the hold, and the takeout lender sees a file without the credit damage from the first version. The property and the rent were identical in both versions. Only the credit behavior during the hold changed.
Where the General Rule Breaks
Thin credit or first-timer status. A thin file gets more scrutiny, especially on a large out-of-state rehab. First-timers typically qualify at the lower leverage tiers, and a co-borrower can change how a lender scores the file. Lendmire’s article How Hard Money Lenders Score a First-Time Flipper With a Co-Borrower explains that case.
Guarantor versus entity. Both loans may be made to an LLC, subject to lender program eligibility. The score still belongs to the person who guarantees the loan, not to the entity. Most lenders pull credit on any member above an ownership threshold that varies by lender.
A note already past maturity. Once the due date passes, the lender can charge default interest or start foreclosure. The size of those penalties is set by the note, so read yours. Extensions are generally at the lender’s discretion and are far easier to get while the loan is current. Extension fees are common.
A vacant or unfinished property. Many DSCR programs want a lease or a market rent schedule. A property that is not rentable yet often needs an extension first, because the takeout cannot be underwritten on rent that does not exist.
Soft pull versus hard pull. Some lenders pull softly at pre-qualification and hard at full submission. A hard pull shows as an inquiry like any other. Confirm which applies before you apply.
Does the loan build credit? Do not count on it. Many private lenders do not report ongoing payments to the bureaus. A default can still hurt you, and a recorded lien can show up for later lenders.
Very low scores. A score below the program’s minimum does not mean no lender will touch the deal. It means the file needs a different lender and different terms, and the cost will show up in leverage and conditions.
Key Terms Defined
Balloon payment: The full unpaid principal due at once at the end of a loan term.
Maturity date: The day the note comes due and the balloon is owed.
Guarantor: The person who personally promises to repay the loan, whether or not an LLC holds title.
After-repair value (ARV): The lender’s estimate of what the property will be worth once the rehab is done.
Seasoning: The waiting period a lender wants after you buy a property before it will refinance.
PITIA: Principal, interest, taxes, insurance, and association dues, the full monthly obligation used in the coverage ratio.
Overlay: An extra rule a lender adds on top of its base program.
Pre-Maturity Credit Checklist
A short list works better than good intentions.
- Pull your reports and read the middle score well before the note is due.
- Pay every account on time, and keep card balances low.
- Do not open new credit lines, finance a car, or co-sign anything during the hold.
- Fund overruns from cash reserves where you can, not from cards.
- Keep liquid funds visible for the reserves the takeout lender will ask about.
- Start the appraisal and rent schedule before you are up against the date.
- Ask your hard money lender about extension terms while the loan is current.
Tax treatment varies by how the funds are used and how the property is held, so consult a qualified professional before relying on any deduction.
Frequently Asked Questions
Do hard money lenders check credit?
Yes, in most cases. They pull credit on the individuals guaranteeing the loan, even though the property carries most of the weight. The score influences eligibility, leverage, and conditions, not just yes or no.
What credit score do I need for my first flip?
It varies by lender, property, and experience. Across Lendmire’s network, hard money programs typically start at 620 with added conditions below 660. First-time investors qualify at the lower leverage tiers, subject to lender guidelines.
What if my score drops during the rehab?
Your existing hard money loan usually will not change, because nobody re-pulls credit mid-term. The problem shows up at the takeout, where a new lender applies its own floor and pricing. Pay down balances, keep accounts current, and talk to your lender about an extension if you need time to recover.
Can I refinance out with weak credit?
Sometimes, but with tradeoffs. A 620 floor exists in parts of the network, while most DSCR programs want around 660 and the strongest leverage needs 700+. A weaker score usually means lower leverage, tighter terms, or both.
Does an LLC change the credit question?
The entity can hold title and take the loan, depending on program guidelines, but lenders still review the personal credit of the guarantors. The LLC does not have a score that substitutes for yours.
Next Step
If you are buying, rehabbing or refinancing an investment property on a short timeline and want to see how the numbers work, Lendmire can help you compare hard money options based on the project, the exit plan, leverage, and your goals. Lendmire is a mortgage broker arranging financing through select lenders in its wholesale network, across 41 markets, including Washington, D.C. Reach the team at 828-256-2183, or use the quote request page.
About Lendmire
Lendmire is a DSCR-focused mortgage brokerage, NMLS# 2371349, placing investor loans across 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed by the lender around a property’s rental income rather than personal income documentation, which fits LLC-held rentals, self-employed investors, and portfolios scaling past conventional financed-property limits. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Investopedia: Hard Money Loan
2. Motley Fool: Balloon Payment
3. CFPB: What Is a Balloon Payment? When Is One Allowed?
4. Fannie Mae’s appraisal forms reference
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Hard Money Loan ARV Requirements in a Small Town With No Comps · Seasoning Rules for a Two-Step DSCR Cash-Out After Hard Money · Can a DSCR Refinance Close Before Hard Money Maturity on a Long Rehab?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.