The Quick Read: Yes, lenders fund only part of the purchase price, so you cover the remainder with your own cash, plus closing costs and reserves, and no program on a condo purchase funds 100% of the price, though how much cash you need depends on the deal structure, your experience, and the building itself.
- On a bridge purchase with no rehab, leverage runs up to 80% of the purchase price, so your cash share starts around 20%.
- On a cash-out or rate-and-term refinance of a condo you already own, leverage runs up to 65% of value, so your equity is the “down payment.”
- On a fix-and-flip, leverage is sized on project cost, and it is capped at 75% of after-repair value.
- The condo building gets reviewed along with the unit and with you.
Every figure here varies by lender, property, and experience. Nothing here is a commitment to lend.
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.
What Does “Down Payment” Mean on a Hard Money Loan?
On a hard money loan, the down payment is a calculated gap, not a fixed fee. It is the difference between what the lender funds and what the deal costs. Change the structure, and the gap changes.
A hard money loan is short-term financing secured by the property itself. The lender cares most about the asset, the plan, and the exit. That is why leverage is expressed against value or cost, and why you always put something in.
One naming trap deserves a quick clear-up. In consumer finance, a bridge loan usually means short-term financing that carries a homeowner from one property to the next. An investor’s hard money bridge loan is different. It is a business-purpose loan on a non-owner-occupied property, designed to carry you until you sell or refinance into long-term financing.
Hard money bridge loans are reviewed differently from a standard owner-occupied mortgage, because they are investor loans built around the property and the plan.
How a Hard Money Bridge Loan on a Condo Sizes the Down Payment
Across the wholesale network Lendmire works with, the loan is sized by structure. Each structure has its own ceiling, and your cash covers whatever sits above it. The table shows the main ones.
| Structure | Typical leverage ceiling | Your cash share |
|---|---|---|
| Bridge purchase, no rehab | Up to 80% of purchase price | Roughly 20% or more |
| Cash-out or rate/term refinance | Up to 65% of value | Equity left in the condo |
| Flip, fewer than 2 projects | 85% of project cost | About 15% of cost |
| Flip, 2+ projects | 90% of project cost | About 10% of cost |
| Flip, 5+ projects | 93% of project cost | About 7% of cost |
Two details keep these numbers honest. First, every flip tier is capped at 75% of after-repair value, so the cap often binds before the cost percentage does. Second, the top tiers are reserved for experienced investors, and first-time investors qualify at the lower leverage tiers. All of this is subject to lender guidelines and varies by lender, property, and experience.
Up to 100% of the rehab budget can fund in draws against completed work. That is a rehab-budget figure, not a purchase LTV. You still fund the purchase side yourself.
There is no true 100% purchase program. When a lender advertises “100% financing,” it is usually describing a rehab budget or a cross-collateral structure, and someone still has equity at risk.
Worked example: a purchase with rehab
Run the numbers on a flip using modeled assumptions, not market data. Say a borrower with 2+ completed projects has total project cost equal to 85% of the after-repair value. At the 90% cost tier, the loan would be 76.5% of after-repair value. That exceeds the 75% cap, so the cap binds.
The borrower covers a bit more than 11% of cost, not the 10% the tier suggests. This is a common surprise on rehab files, and it explains why the same investor can see different cash needs on two similar condos.
Does the Condo Itself Change the Cash You Need?
The unit is the collateral, but the building gets underwritten too. A strong borrower with a good unit can still run into a weak project. When that happens, a lender may reduce leverage, reprice the file, or decline it.
Lenders look at the building as a whole. Typical questions cover how many units are investor-owned, the health of the association’s finances, any pending litigation, the amount of commercial space, and whether the building operates like a hotel. Lenders gather this through an association questionnaire and the building’s budget and insurance documents.
For perspective, the agency world has its own condo screens. Fannie Mae’s ineligible project standards flag features such as heavy commercial space, timeshare or fractional ownership, and mandatory memberships. Those are agency rules, not the rules of a private bridge lender. Still, they show the kind of building traits that make any lender look twice.
Condo-hotel and hospitality-style projects are not offered on the hard money program. If your target is one of those, plan a different route.
Valuation matters too. A bridge lender picks its own valuation product, such as an appraisal or a broker opinion. For reference, the agency forms are Form 1073 for an individual condo unit and Form 1025 for small residential income properties. Condo comps can be thin, so a lender that sizes off value may land lower than your purchase price suggests.
What Cash Do You Need Beyond the Down Payment?
The down payment is only the headline. Your real capital need is larger.
- Closing costs. These may sit outside the loan, so cash to close can exceed the nominal down payment.
- Reserves. Lenders often want proof of liquid funds beyond cash to close. Requirements vary by lender and file.
- Interest carry. The loan is interest-only, so you pay during the hold.
- Association items. Dues and any association fees continue while you own the unit.
- Rehab cash flow. Draws reimburse completed work, so you may need to front some costs.
Hard money underwriting leans on the property, the plan, and the exit more than on traditional personal-income documentation. You still show where the down payment came from. Expect to document funds and reserves in the usual way.
Credit is part of the file. A 620 minimum score applies, with additional conditions below 660. Underwriting stays asset-based, but a stronger score can make the file easier to place. Lendmire’s piece A Higher Credit Tier vs a Larger Down Payment on a Hard Money Loan covers that tradeoff.
Where the General Answer Bends
Several situations change how much cash you personally bring.
Refinancing a condo you already own. There is no purchase down payment. Your equity is the cushion. With leverage capped at 65% of value on a cash-out or rate/term refinance, you need at least 35% equity in the unit for the numbers to work.
Pledged equity in another property. Some lenders will consider cross-collateral toward your contribution. That is a lender-by-lender call and not a standard feature, so ask before you assume it. Even then, someone has equity at risk. Call it own funds or pledged equity, never no skin in the game.
Borrowed or gifted funds. Whether these can serve as the down payment depends on the lender and the file. Plan on documenting the source either way.
Experienced borrowers. The leverage tiers reward completed projects. A track record can cut your cash share from about 15% of cost to about 7%, subject to the 75% after-repair cap.
A condo that fails review. If the building shows red flags, expect lower leverage or a decline. The unit’s price does not rescue a weak project.
Short-term rental condos. Buildings that lean on short-term rentals can draw extra scrutiny. Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income.
The Exit Decides Whether the Condo Works
A condo bridge loan is only as good as its takeout. The term is 6 to 18 months, interest-only, with no prepayment penalty. There are no multi-year options on this program, so you need a plan to sell or refinance within that window.
Many investors refinance out of hard money into long-term rental financing once the property is stabilized. Lendmire arranges that path, and the complete DSCR loans guide explains how it works. DSCR is short for debt service coverage ratio. It compares monthly rent to the full monthly obligation of principal, interest, taxes, insurance, and any association dues (PITIA).
Here is the catch for condos. Long-term lenders review the building too. A high investor concentration or a project that fails review can make the refinance harder. Check the building before you commit to the bridge, not after.
Coverage targets also matter at the exit. Many select DSCR programs start at 1.00 coverage, and stronger ratios open better leverage. A separate select-lender path goes below 1.00, with leverage and terms adjusted. Clearing 1.00 does not mean positive cash flow, because repairs, vacancy, management, utilities, and capital costs sit outside the calculation.
When a Condo Bridge Loan Is the Wrong Tool
Skip it when you cannot document your cash. Skip it when the building has obvious litigation or heavy commercial use and you have no backup exit. Skip it when your plan needs more than 18 months of runway, because the program has no multi-year option.
It also fits poorly when you want to buy and hold with no rehab and no near-term refinance. In that case, a long-term rental loan from the start may be simpler.
Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.
Key Terms Defined
Loan-to-value (LTV): The loan amount divided by the property’s value.
Loan-to-cost: The loan amount divided by purchase price plus rehab budget.
After-repair value (ARV): What the property is expected to be worth once the work is finished.
Draw: A release of rehab funds after completed work is verified.
Reserves: Liquid funds you must show beyond cash to close.
Warrantable condo: A condo project that meets standard agency eligibility, which usually makes financing easier.
Frequently Asked Questions
Can I get 100% financing on a condo with hard money?
No program funds 100% of a condo purchase. A rehab budget can fund up to 100% in draws against completed work, but you cover the purchase side. Cross-collateral can reduce your cash on some files. Even then, equity is at risk.
What credit score do I need?
The program uses a 620 minimum, with additional conditions below 660. First-time investors qualify at the lower leverage tiers. Underwriting stays asset-based, focused on the property, the plan, and the exit, and approval is never assured.
Does the condo have to be warrantable?
Not always, since private lenders set their own standards. A building with red flags may still mean lower leverage, repricing, or a decline. It can also make the later refinance harder, so check the project before you commit.
Can an LLC borrow?
Many investors hold title in an entity, depending on program guidelines. Lenders generally still look to a personal guarantor. Confirm the structure before you sign a contract.
How big can the loan be?
Loans run up to $5,000,000, with larger amounts by exception. Smaller balances vary by lender. Condo values rarely reach those limits, so leverage and the building usually decide the outcome first.
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. As a broker, it arranges financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. The calculator on this page is an illustrative estimate, not a quote.
Condo buildings are underwritten before borrowers are, so the strongest investors read the project documents before they read the loan terms.
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
About Lendmire
Lendmire (NMLS# 2371349), a non-QM mortgage broker serving investors in 41 markets including Washington, D.C., helps structure DSCR scenarios commonly evaluated around a property’s rental income rather than personal income paperwork, subject to lender guidelines. A Scotsman Guide Top Mortgage Workplace in 2025 and 2026, Lendmire places loans through wholesale investor lenders and is not a direct lender.
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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. Corporate Finance Institute: Hard Money Loan
2. Corporate Finance Institute: What Is a Bridge Loan
3. Fannie Mae Selling Guide B4-2.1-03: Ineligible Projects
4. Fannie Mae: Appraisers & Property Underwriting
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: DSCR Down Payment Requirements With Gift Funds From Parents · Can You Use a Hard Money Loan to Buy Out Siblings or a Partner? · Hard Money Overrun Documentation for a BRRRR Rehab Into a DSCR Loan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.