The Quick Read: A hard money flip loan is underwritten to the deal, so the file is mostly proof that the property, the plan, and the exit all hold up. Lenders in a wholesale network still want entity papers, proof of cash, a purchase contract, a line-item scope of work, and comparable sales that support the after-repair value. The paperwork does not end at closing, because rehab money is released in draws against documented, completed work.
- The file answers four questions: what is the property worth, what will the work cost, can you execute, and how do you get out.
- Underwriting stays asset-based, but a 620 credit score is still the minimum, with extra conditions below 660.
- The scope of work drives the after-repair value (ARV), the budget, and the draw schedule, so it is the document to get right.
- You usually fund each stage of the rehab first and get reimbursed after the work is verified.
- The same records you build for draws often carry into your refinance file later.
What Is the Lender Actually Verifying?
The lender is checking four things, and every document in the file answers one of them. Knowing which question a paper answers tells you how much effort to put into 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.
The property. Is the purchase price reasonable, and what is it worth as-is? The contract, photos, title work, and a valuation answer this.
The project. Will the planned work create the value you claim? The scope of work, contractor bids, and the ARV comps answer this.
The borrower. Can you carry the deal and finish it? Entity papers, bank statements, and a track-record summary answer this.
The exit. How does the lender get repaid? A sale plan or a refinance plan answers this.
Hard money differs from a bank mortgage because personal income is not the centerpiece. Across the wholesale network, the loan is sized to the property and the plan. That is why the deal file carries more weight than your pay stubs would.
The Master Document Table
Here is the full file at a glance. Requests vary by lender, property, and experience, so treat this as the typical set.
| Document | What it proves | Common problem |
|---|---|---|
| Purchase contract | Price, terms, parties | Name differs from entity |
| Entity documents and EIN letter | Who is borrowing | Missing operating agreement |
| Bank statements | Cash and reserves | Unexplained large deposits |
| Track-record summary | Your experience | No addresses or outcomes |
| Scope of work and budget | Cost and plan | Vague line items |
| Contractor bids | Market-rate pricing | Not itemized |
| ARV comp pack | Finished value | Comps too far or too old |
| Insurance and title | Collateral is protected | Wrong named insured |
| Exit plan | Repayment path | Timeline outruns the term |
Borrower and Entity Documents
Most flippers borrow through an LLC, and the lender will want the paper trail to match. Lenders typically also want a government ID for each signer and a personal guarantee from the principals.
A brand-new entity usually draws extra questions, so have the paperwork complete before you submit. LLC-titled borrowing is subject to lender program eligibility, and the lender may ask for more on a newly formed entity.
The most common stall is a name mismatch. If the contract says one entity and the insurance binder says another, the file sits until someone corrects it. Check that every document uses the same legal name before you upload anything.
Traditional personal-income documentation and pay stubs are not the core of this product. Some lenders still request them for newer borrowers or larger loans, so ask early instead of assuming either way.
Proving Experience (and What First-Timers Do Instead)
Experience is not just a résumé line, because it sets your leverage tier. In the verified program parameters, fix-and-flip loans fund up to 93% of project cost at 5 or more completed projects, up to 90% of project cost at 2 or more, and up to 85% of project cost with fewer than 2. Every tier is capped at 75% of ARV. These figures vary by lender, property, and experience, and nothing here is a commitment to lend.
Document your track record as a simple table. Include each property address, purchase and sale dates, the scope you completed, and the outcome. Settlement statements from past sales back it up best.
First-time investors qualify at the lower leverage tiers. You can strengthen the file with a detailed scope, firm contractor bids, a builder or contractor partner with a verifiable history, and more cash in the deal.
Liquidity: Showing You Can Carry the Project
Lenders want to see cash that is yours, seasoned, and sourced. Expect to document the down payment, closing costs, and a reserve cushion. You also need working capital to start work, because the rehab budget is reimbursed through draws and does not arrive in a lump at closing.
Provide recent bank statements and be ready to explain any large deposit. A transfer between your own accounts is easy to explain. A deposit with no paper trail is a different conversation.
Whether non-cash assets such as home equity count toward reserves depends on the lender. Plan on liquid cash and treat anything else as a bonus.
Scope of Work and Budget: The Document That Drives Everything
The scope of work (SOW) is a line-by-line list of every repair, with a cost beside each one. It does three jobs. It sets the renovation budget, it feeds the appraiser’s ARV opinion, and it defines the draw milestones.
A weak scope looks like a single line reading kitchen and bath updates. A strong scope names each item, the materials, the quantity, and the contractor’s price. Lenders generally underwrite rehab at market contractor pricing, not at your own discounted cost, so a budget built on favors invites a revision request.
Attach contractor bids that match the scope line for line. Add each contractor’s license and insurance certificate where required. The budget total should reconcile to the loan request, or the file will bounce back with questions.
ARV Support for a Single Family Home
ARV is the estimated value after the work is done. The lender caps the loan at 75% of it on this program, so the comp pack carries real weight.
A good single-family comp pack uses recent sales of similar homes nearby, matched on size, bedroom and bath count, age, and finish level. Use completed renovations as comps for your finished product, and include sold properties instead of active listings. Add photos so the underwriter can see the finish level for themselves.
The appraiser receives the rehab budget, so a vague scope can produce a softer value and a smaller loan. If the ARV comes in low, the loan shrinks and your cash requirement rises.
Single-family files also lean on a few property details. Include the legal description, occupancy status, and any permit history for prior work. Single-family comps can be thin in a small neighborhood, so widen the radius carefully and explain why each comp fits.
What Happens After Closing: Draw Documentation
At closing, the acquisition portion funds and the renovation money is set aside as a holdback. Up to 100% of the rehab budget funds in draws against completed work. That figure applies to the rehab budget, never to the purchase.
Most draw packets include a draw request, photos of the work, invoices or receipts, an updated budget, and a third-party inspection. Some lenders add lien waivers and proof of payment. Yieldstack’s draw guide explains that these loans typically reimburse after work is done, so your cash or your contractor’s credit funds each stage first.
The same guide lists three common reasons a draw gets cut:
- Materials were delivered but not installed.
- Work was done under a change order nobody approved.
- A line item lacked its required lien waiver.
For a public template of how rehab escrows are documented, look at the federal owner-occupant rehab program. HUD’s FHA 203(k) borrower acknowledgement describes a 10 percent holdback on each draw request to assure the work is completed and to protect against liens. That is a rule of an owner-occupied program, not a private hard money norm. Treat it as a picture of the logic, not as the percentage your lender will use.
Change orders deserve their own habit. Get written approval before the work starts, then keep the invoice and photos that support the draw. A change you made verbally is a change the inspector may refuse to pay for.
Where the General Rule Breaks
Purchase-only or light cosmetic deals. With no real rehab, there is no scope, draw schedule, or rehab inspection. On the program parameters, bridge purchases without rehab run up to 80% of purchase price. You fund the small cosmetic work yourself.
Cash-out and rate/term refinances. The file shifts toward proving current value and the existing payoff. Those loans run up to 65% of value, and a rehab-budget section is usually absent.
Properties you already own. The lender wants a payoff statement and evidence of what you have put in. Receipts and photos of the work already done become your basis story.
Partners and co-guarantors. Each guarantor typically needs their own ID, credit authorization, and liquidity documentation. Plan for the slowest person’s paperwork.
Out-of-state borrowers. National lenders usually require a full appraisal instead of a broker price opinion, so build that into the plan. Your contractor’s local track record matters more when you are not on site.
Ineligible collateral. The program covers non-owner-occupied residential property of 1-4 units. Owner-occupied homes, commercial property, and land are not offered.
Your Documentation Timeline
Build the file in stages, so nothing arrives late.
1. Before you offer: Have your entity formed, your statements gathered, and a draft track-record summary ready.
2. Under contract: Send the contract, the draft scope, contractor bids, and the comp pack.
3. After the term sheet: Upload what the condition list asks for, and confirm title and insurance.
4. During the rehab: Submit each draw packet with photos and invoices, and get change orders approved first.
5. At exit: Gather your payoff request, or your refinance or sale documents.
Plan the exit backward from the loan term. The program runs 6-18 months, interest-only, with no prepayment penalty. There are no multi-year options, and the term has to outlast the rehab, the lease-up, and your next lender’s review. Many investors refinance out of hard money into long-term DSCR financing once the property is stabilized, and Lendmire brokers that path.
Why Files Stall (and the Fix)
Most delays are small and avoidable.
- Mismatched names across documents. Fix: use the exact legal entity name everywhere.
- Unsourced deposits. Fix: write a short explanation and attach the transfer record.
- A budget that does not match the loan request. Fix: reconcile the totals before you submit.
- Comps that are too old or too far away. Fix: tighten the radius and explain any exception.
- A scope that reads like a wish list. Fix: itemize every repair with a price.
- An exit that outruns the term. Fix: shorten the plan or choose a longer-runway structure.
Be honest about cost, too. Yieldstack’s cost breakdown separates the loan’s cost into points, interest, draw and inspection fees, and extension fees. Ask for every fee in writing, including any charge on rehab money you have not yet drawn.
Key Terms Defined
Scope of work (SOW): a line-item list of every planned repair, with a cost for each.
After-repair value (ARV): the estimated value of the home once the renovation is complete.
Draw: a release of rehab money after the lender verifies completed work.
Holdback: the renovation budget set aside at closing and paid out through draws.
Loan-to-cost: the loan amount divided by the total project cost, meaning the purchase price plus the rehab budget.
Proof of funds: bank statements or similar records showing you have the cash to close and carry the project.
SREO (schedule of real estate owned): a list of the properties you currently own, with balances and values.
Frequently Asked Questions
Do I need traditional personal-income documentation for a hard money flip loan?
Often not, because the loan is sized to the property and the plan. Some lenders ask for them from newer borrowers or on larger balances. Ask your broker at the start so there are no surprises later.
Can I apply without an LLC?
Some lenders will lend to an individual, while many prefer an entity. Entity borrowing is subject to lender program eligibility. If you lack an entity, form one before you sign the contract so every document carries the same name.
What if I am a first-time flipper?
First-time investors qualify at the lower leverage tiers, which is 85% of project cost with fewer than two completed projects, and always capped at 75% of ARV. Strengthen the file with a detailed scope, firm bids, and more cash in the deal.
What is the difference between a scope of work and a budget?
The scope describes what work will be done, and the budget attaches a cost to each item. Lenders want both, and they want the totals to match.
What documents do draws require?
A draw request, photos, invoices, an updated budget, and a third-party inspection are typical.
A Practical 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 that arranges financing through select lenders in a network spanning 41 markets, including Washington, D.C. Programs change and every file is underwritten individually.
Tax treatment varies by how the property is held and sold; consult a qualified professional.
The investor who keeps clean draw records on this flip will have the strongest refinance file on the next one.
About Lendmire
A DSCR-focused mortgage broker, Lendmire (NMLS# 2371349) places investor financing across 41 markets — 40 states plus Washington, D.C. — with DSCR eligibility generally reviewed by the lender on property cash flow instead of tax returns, subject to lender guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in 2025 and 2026.
Hard money often opens the deal, and a refinance typically closes the chapter – see the hard money loan overview.
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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. Yieldstack: fix-and-flip loan draw schedule
2. HUD FHA 203(k). Borrower’s Acknowledgement (HUD-92700-A)
3. Yieldstack: how fix-and-flip loans work and what they cost
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can a 1099 Contractor Get a Hard Money Loan to Flip a House? · Can Hard Money Cover a Fix and Flip Purchase? · Can You Have More Than One Fix and Flip Hard Money Loan at Once?
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
Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.