The Quick Read: A hard money lender does not want a casual status report during your rehab; it wants a draw package that proves finished work, so the progress update is really a draw request backed by documents and, on most files, some form of verification. Each lender sets its own rules in the loan agreement, and terms vary by lender, property, and experience.
- Rehab money is held back at closing and released in stages against completed work.
- A typical package includes invoices, dated photos, an updated budget, and lien waivers.
- Verification may be an inspector, borrower photos or video, or a mix.
- You usually carry costs between draws, so working capital matters beyond your down payment.
- The same paperwork later supports a long-term refinance file.
Investors often ask what “progress updates” means because no federal rule and no industry standard defines it. Brokers who place these files across many lenders see the same pattern with different details. Here is how the cycle works, where it breaks, and how to plan around it.
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 Lenders Mean by “Progress Updates”
A progress update is any proof of work that a lender uses to decide whether to release money. The formal version is the draw request. Informal check-ins, like a quick photo text to your loan contact, help the relationship but rarely release funds.
Why the distinction matters: the draw package is the document that moves money. Check-ins are courtesy. Some lenders also ask for a brief status note between draws, and a silent stretch can prompt an extra inspection. Lenders worry about overfunding, which means paying out more than the work in place is worth.
Hard money is private, business-purpose lending. The terms live in each lender’s loan agreement, not in a rulebook. Across the wholesale network Lendmire works with, the draw mechanics look similar, but verification method, draw count, and fees differ.
Key Terms Defined
- Draw: a release of rehab funds after you show completed work.
- Holdback: the rehab money the lender keeps back at closing and releases in stages.
- Schedule of values: a line-item scope of work with a dollar amount for each item.
- Percent complete: the share of each budget line that is actually finished.
- Lien waiver: a signed paper from a contractor or supplier saying they were paid and will not file a lien against the property.
- Change order: a written, approved change to the scope or price of the work.
- Variance: the gap between what a line item was budgeted and what it cost.
How the Money Actually Moves
The purchase portion funds at closing. The rehab budget does not. It sits in a holdback and comes out in stages. On the hard money program Lendmire brokers, up to 100% of the rehab budget funds in draws against completed work. That is a rehab-budget figure, not a purchase leverage figure, and it varies by lender, property, and experience.
Many lenders reimburse. You pay the contractor first, show the finished work, and get repaid after verification. Some lenders advance a portion up front, but plan for the reimbursement model.
Leverage on the purchase side is tied to cost and experience. On the program Lendmire places, fix-and-flip leverage runs 93% of project cost at 5 or more completed projects, 90% of project cost at 2 or more, and 85% with fewer than 2, with every tier capped at 75% of after-repair value. Those are loan-to-cost figures, they vary by lender, property, and experience, and nothing is a commitment to lend.
The Draw Cycle, Step by Step
1. Scope and budget are approved at underwriting. Your line-item scope of work becomes the draw budget. Some lenders compare it with the after-repair value.
2. Closing. Purchase funds go out. The rehab portion stays in holdback.
3. You fund the first phase. Some lenders require you to start with your own capital. Others advance a slice.
4. You submit a draw request. List the finished line items. Attach invoices, photos, an updated budget, and lien waivers.
5. The lender verifies. That means an inspector, photos or video, or a hybrid.
6. The lender releases funds for what it confirmed. Partly finished work earns partial credit.
7. The final draw comes with final lien waivers and a final inspection or completion proof.
This mirrors commercial construction billing. Procore explains that a pay application attaches a schedule of values, continuation sheets, photo documentation, vendor invoices, and lien waivers, and that the line-item costs must match the schedule of values. Hard money lenders usually run a simpler version. That is an analogy, not a hard money rule.
The Update Package, Item by Item
| Item | What it proves | Common mistake |
|---|---|---|
| Draw request form | Which lines you claim | Claiming more than is done |
| Invoices | Costs are real | Missing or unsigned |
| Dated photos | Work is in place | Only wide shots, no close-ups |
| Updated budget | Spend vs. plan | Totals that don’t tie |
| Lien waivers | Contractors were paid | Collected late |
| Change orders | Approved scope shifts | Billed before approval |
A package that does not reconcile gets sent back. If your summary total does not match the line-item sheet, expect the request to wait another cycle. Getbuilt notes that adding an unapproved change order is a quick route to a rejected application. That is a construction-billing source, but the logic carries over.
Verification: Who Checks the Work
Verification methods differ by lender, and the loan agreement sets the method.
| Method | How it works | Tradeoff |
|---|---|---|
| Third-party inspector | Visits and reports percent complete | Adds cost and time |
| Photo or video review | You document the work | Lighter, depends on photo quality |
| Hybrid | Photos most draws, inspector at key points | Mixed |
An inspector confirms the work exists and matches the claimed percent complete. It is not a code or permit sign-off. City inspections and lender inspections are separate approvals, and passing one does not satisfy the other.
Strong photos are a skill. Shoot wide and close, label by room and line item, and capture installed work, not materials sitting in a garage. Delivered is not installed.
What a Reporting Calendar Looks Like
No standard cadence exists, so treat this as a typical pattern, not a rule. Most investors draw at natural milestones rather than on a calendar.
- Demo: before-and-after photos, haul-off invoices, any hidden-damage change orders.
- Rough-in: plumbing, electrical, and mechanical invoices, plus permit status where required.
- Drywall and structure: photos of completed walls, partial-credit lines.
- Finishes: flooring, paint, fixtures, cabinets. Many draws happen here.
- Final: completion paperwork, final lien waivers, final photos or inspection.
Draw count is negotiable at some lenders. Fewer draws can mean fewer per-draw fees, but more of your own cash is out at once. Pick the rhythm that fits your cash position.
Where the Rules Break
Verification type changes cost and pace. Photo-only draws are lighter. Inspector draws add a visit, and some lenders charge a fee for each one. A lender that promises an inspector and never sends one stalls you, so ask how the process runs before you sign.
Permits. Not every hard money lender ties draws to permit status. A formal contrast helps here. The HUD borrower acknowledgement for the FHA 203(k) program bars draws until required permits are issued. Hard money lenders may or may not do the same.
The 203(k) contrast. FHA 203(k) is an owner-occupant program, not an investor product, but it shows the logic of staged release. HUD Handbook 4240.4 describes a 10% holdback on intermediate draws and percent-complete release by line item. The HUD-9746-A draw request form holds the final release until work is complete and no mechanic’s liens are on the property. Hard money does not follow that standard. Treat it as a picture of the idea, not a rule that applies to you.
Ground-up or very heavy rehab. These may belong in construction financing with monthly pay applications and title updates. On the program Lendmire brokers, ground-up construction is a separate structure, up to 10 units, with its own leverage tiers.
Remote investors. If you live out of town, expect to need a local representative and a clear payment trail. Photos with dates and labels do more work for you than phone calls.
When Scope or Budget Changes
Report changes before they show up on a draw. A change order should be written and approved first, then billed. A variance log, a simple sheet comparing budget to actual by line, keeps your numbers tidy and shows the lender you are in control. If costs run over, your options depend on the lender; Lendmire’s piece Can a Hard Money Lender Increase the Rehab Budget Mid-Project? walks through that separate question.
Red Flags That Trigger Extra Scrutiny
| Red flag | Likely fix |
|---|---|
| Claimed progress beats the photos | Re-submit with accurate percent complete |
| Long silence, no photos | Send a short written status note |
| Missing lien waivers | Collect before the next request |
| Totals that don’t reconcile | Tie the summary to line items |
| Unapproved change orders | Get approval first |
| Stalled work | Explain the delay and revised timeline |
Missed payments or visibly delayed work can prompt extra inspections on a file. Honest, early communication usually costs less than a surprise.
Carry, Cash, and the Exit
Plan for working capital beyond your down payment. Because draws reimburse finished work, you carry costs between releases. Some lenders charge interest on the full balance from closing, and per-draw or inspection fees can apply. Compare terms, not just headline price: verification method, draw count and fees, turnaround, interest on undrawn funds, and the change-order process.
Timing matters too. On the hard money program Lendmire brokers, terms run 6 to 18 months, interest-only, with no prepayment penalty, subject to lender guidelines. A slow draw can push completion, and a note that matures before the property is finished and stabilized is a real structural risk. Choose a term with slack.
Keep your paperwork as you go. Invoices, proof of payment, lien waivers, draw history, and completion documents often feed the next loan. Many investors refinance out of hard money into long-term DSCR financing once the property is stabilized, and Lendmire brokers that path. The complete DSCR loans guide explains how that refinance is reviewed.
Frequently Asked Questions
How often do I have to send updates to a hard money lender?
Most lenders tie updates to draw requests at project milestones rather than a fixed calendar. Some also expect a short status note if work goes quiet. Your loan agreement sets the rule, so ask for the draw process in writing before closing.
Can I use photos only for verification?
Sometimes. Some lenders accept dated, labeled photos or video; others send an inspector. Experience can matter for who gets the lighter option. Terms vary by lender, property, and experience.
What if a draw is denied or held?
Find the reason first. The usual causes are missing lien waivers, totals that do not reconcile, unapproved change orders, or photos that do not support the claimed percent complete. Fix the item and resubmit. A held draw usually waits for the next review cycle.
Does the inspector check code compliance?
No. An inspection confirms that work exists and matches the claimed progress. Permits and city inspections are separate sign-offs you must handle yourself.
Do I need my own cash during the rehab?
Usually yes. Draws commonly reimburse completed work, so you carry costs between releases. Budget working capital beyond your down payment, and keep a cushion for overruns.
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 broker arranging financing through select lenders across 41 markets, including Washington, D.C. Tax treatment varies; consult a qualified professional.
For current guidelines and terms, see Lendmire’s hard money loan programs page.
About Lendmire
Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income rather than personal income, subject to lender and program guidelines, a fit for self-employed investors and LLC-owned portfolios. Lendmire was recognized as a Scotsman Guide Top Mortgage Workplace in 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. Procore: AIA G702 Application for Payment
2. Getbuilt: AIA G702 Pay Application
3. HUD 203(k). Borrower’s Acknowledgement
4. HUD Handbook 4240.4, Chapter 5
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Much a Hard Money Lender Will Lend on a Fix-and-Flip · How Rehab Scope Changes the Contingency a Hard Money Loan Needs · How a Hard Money Lender Counts Seasoning on a Flip
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.