Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
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.
Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
The Quick Read: A hard money flip loan is sized by the lowest of several caps: a percentage of project cost, a ceiling tied to after-repair value, and the lender’s own maximum loan size. Whichever cap is lowest sets your number, so the advertised percentage rarely predicts what one deal receives. Your cash to close is the gap between total cost and that loan, plus closing costs. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
- Across Lendmire’s wholesale network, flip leverage typically runs 85% of project cost with fewer than 2 completed projects, 90% at 2+, and 93% at 5+.
- Every tier is capped at 75% of after-repair value (ARV), and that cap often binds first.
- Up to 100% of the rehab budget funds in draws against completed work, not as cash at closing.
- Loan amounts run up to $5,000,000, larger by exception. All of this varies by lender, property, and experience.
Is There an Official Maximum?
No statute or conforming-style limit caps a hard money loan. Conforming and jumbo mortgage limits do not apply, because flip loans are business-purpose private credit. The ceiling comes from three places: the lender’s policy, the deal’s numbers, and the borrower’s track record.
That is why two investors can ask the same lender about the same house and get different answers. The program maximum is only the outer wall. Most files never reach it, because a cost cap or an ARV cap stops them first.
How Do the Caps Work, Step by Step?
The maximum loan is the smallest result from a short sequence of tests. Here is how a lender walks through it.
1. Set the purchase basis. The purchase advance is sized on the lesser of price or as-is value.
2. Set the rehab budget. Binding contractor quotes and a detailed scope feed this number. The rehab portion is a holdback, released in draws.
3. Estimate ARV. ARV is what the property should be worth once repairs are done, which differs from today’s as-is value. Baselane explains that this figure rests on comparable sales.
4. Run the cost cap. Apply the leverage percentage for your experience tier to total project cost.
5. Run the ARV cap. Multiply ARV by 75%. The total loan, purchase advance plus rehab draws, cannot exceed that.
6. Take the lower number. Then check it against the program’s loan-size ceiling.
7. Calculate your cash. Total cost minus the loan, plus closing costs and carry, is what you bring.
The lender’s own valuation governs step three, not yours. FortuneBuilders notes that ARV is subjective and that different valuers can reach different figures for the same property. Build your plan around the lender’s number.
Key Terms Defined
Loan-to-cost (LTC): The share of total project cost, purchase plus rehab, that the lender advances.
After-repair value (ARV): The estimated market value of the property once planned repairs are complete.
Loan-to-ARV: The total loan divided by ARV, which acts as a ceiling on the whole loan.
Rehab holdback: Renovation money held by the lender and released in draws as work is completed and inspected.
As-is value: What the property is worth today, before any work.
Skin in the game: The cash you put into the deal yourself.
Worked Example One: The Cost Cap Controls
Run the numbers on a flip, using percentages of ARV instead of dollars. These are modeled assumptions, not market data.
| Input | Value |
|---|---|
| Purchase price | 60% of ARV |
| Rehab budget | 15% of ARV |
| Total project cost | 75% of ARV |
| Tier at 90% of project cost (2+ projects) | 67.5% of ARV |
| ARV cap | 75% of ARV |
| Binding limit | The cost cap |
| Borrower cash (before closing costs) | 7.5% of ARV |
The cost cap lands below the ARV cap, so the experience tier decides the loan. At the 85% tier the loan is smaller, and at the 93% tier it is larger. Even 93% of project cost here comes to about 70% of ARV, still under the ceiling. Buying well below ARV is what gives the cost cap room to work.
Worked Example Two: The ARV Cap Takes Over
Now change the deal. The purchase is 65% of ARV and the rehab is 25% of ARV, so total cost is 90% of ARV. This is a heavy rehab on a modest after-repair value.
At the 90% tier, the cost-cap formula would produce a loan above the ARV ceiling, so the loan is trimmed to 75% of ARV. The lower tiers overshoot as well, so every tier hits the same wall. Your cash is the 15% of ARV left between total cost and the capped loan, plus closing costs and carry.
| Scenario | Total cost vs. ARV | Binding cap | Effect |
|---|---|---|---|
| Example one | Well under ARV | Cost cap | Tier sets the loan |
| Example two | Close to ARV | ARV cap | Tier stops mattering |
This is the most common misread of a “90%” headline. It describes a share of cost, and the ARV ceiling can reduce the total. A higher tier helps only when the cost cap is the one binding. When the ARV cap binds, the fix is a better deal, not a better tier.
The 70% Rule Is Not the Loan Cap
Investors often confuse two similar-looking numbers. The 70% rule is an offer-price filter: ARV times 0.70, minus repairs, gives a maximum purchase price. It reserves the remaining 30% of ARV for holding costs, selling costs, and profit. It struggles on low-ARV homes, where 30% of a small number rarely covers fixed costs.
The lender’s ARV cap is a separate test that limits borrowing. Use the 70% rule to decide what to offer, and use the lender’s caps to learn what you can borrow.
Why Does an Approved Amount Fall Short of the Advertised Maximum?
The advertised figure is a ceiling for a perfect file. Several factors pull a real approval below it.
| Factor | Effect on loan | What to do |
|---|---|---|
| Lender ARV lower than yours | Smaller ARV-capped loan | Bring stronger comps |
| Fewer completed projects | Lower cost tier | Start with a simpler project |
| Heavy rehab, modest ARV | ARV cap binds | Trim scope or lower price |
| Rehab budget unsupported | Smaller holdback | Get binding contractor quotes |
| Credit below 660 | Added conditions | Strengthen the file |
Credit matters even though underwriting is asset-based. A 620 score is the minimum in this network, with extra conditions below 660. First-time investors typically qualify at the lower leverage tiers. Every figure here varies by lender, property, and experience, and nothing is a commitment to lend.
How Can You Raise Your Maximum Loan?
You can move the number with a few honest levers.
- Lower the purchase price. Every dollar saved at the table shrinks the cost basis and widens the gap under the ARV cap.
- Bring more cash. More equity cannot lift the ARV cap, but it can cover a shortfall when that cap binds.
- Trim or phase the scope. A smaller rehab lowers total cost against ARV.
- Document your experience. Completed projects move you up the tiers, from 85% to 90% to 93% of project cost.
- Support your ARV. A tighter comp set gives the valuer less room to discount you. PropStream describes ARV as resting on comparable sales and repair quotes, so both need to be solid.
Bridge purchases with no rehab are sized differently, at up to 80% of the purchase price. Cash-out and rate-and-term refinances reach up to 65% of value. Ground-up construction reaches up to 90% of cost and 75% of completed value at 3+ completed projects.
What Does “100% Financing” Really Mean?
There is no true 100% purchase program. When you see “100% financing,” the claim usually means one of two things. Either the rehab budget is funded in full through draws, or the purchase was so deeply discounted that costs fit under the caps with little cash needed.
Funding up to 100% of the rehab budget is real. But it is a rehab-budget figure, released as work is completed. It is not a purchase LTV, and the combined total still sits under the 75% ARV ceiling. Some lenders use cross-collateral on another property to reduce cash. That is a different structure, and it adds risk to a second asset.
How Do Rehab Draws Change the Maximum?
The maximum loan has two parts: an initial advance at closing and a holdback paid out over time. Only the first is cash on day one. The holdback is released after inspected progress, usually in stages tied to milestones.
This matters for cash planning. You carry contractor costs between draws, so budget a working cushion beyond your down payment. Binding contractor quotes and a clear scope also make a lender comfortable releasing funds.
What Do Requirements Look Like Beyond the Number?
Lenders still underwrite the borrower, even when the collateral leads. On most files, expect these items.
- Property type: Non-owner-occupied residential, 1-4 units. Ground-up construction extends to 10 units. Commercial, land, and owner-occupied properties are not offered.
- Credit and experience: A 620 minimum, and the tier your documented projects support.
- Reserves and liquidity: Enough cash to cover down payment, closing costs, and carry.
- Exit plan: A sale, or a refinance into long-term financing.
- Term: 6-18 months, interest-only, with no prepayment penalty. There are no multi-year options on this program.
Does Maximum Leverage Make Sense for Every Flip?
Not always. More leverage reduces the cash you tie up, which lets you run more deals. It also raises your carrying cost and shrinks your cushion if the sale takes longer than planned or the ARV comes in low.
If a deal clears the caps with thin margin, borrowing less can be the smarter choice. The strongest flips have profit left after holding costs even at a lower loan amount. If a project only works at the top tier, treat that as a warning about the deal.
Many investors also plan the next step before they close. Once the property is repaired and rented, they refinance out of the bridge loan into long-term financing. Lendmire brokers that path through DSCR lenders, and the complete DSCR loans guide explains how that stage is sized. Note that DSCR sizes on rent against the monthly obligation, not on ARV, so the two loans test different things. An overstated ARV can leave you stuck at the exit.
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.
Frequently Asked Questions
What is the maximum loan amount on a hard money flip?
Loan amounts in this network run up to $5,000,000, larger by exception, and smaller balances vary by lender. In practice your loan is the lower of the cost cap and the 75% ARV cap. Most flips never reach the dollar ceiling.
Can I borrow based on ARV alone?
No. The ARV cap limits how much you can borrow, but the lender also looks at your credit, experience, cash, and plan. Leverage is set on project cost first, then trimmed by ARV if needed.
What happens if the lender’s ARV comes in low?
The ARV-capped loan shrinks, and the cash you bring rises by the difference. You can respond with stronger comps, a lower purchase price, a trimmed scope, or more equity. In some cases, the right call is renegotiating or walking.
Can a first-time flipper get the top tier?
Rarely. The top tier of 93% of project cost is reserved for 5+ completed projects. First-time investors typically qualify at the 85% tier, with a 620 minimum credit score and extra conditions below 660.
Are rehab funds paid at closing?
No. Up to 100% of the rehab budget funds in draws as completed work is inspected. You carry costs between draws, so keep working cash on hand.
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 traditional personal-income documentation, subject to lender guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in 2025 and 2026.
The exit plan matters as much as the purchase price on short-term financing – 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
2. FortuneBuilders – What Is ARV
3. PropStream – What Is ARV in Real Estate
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 Business Owner Qualify for a Hard Money Fix and Flip Loan? · Hard Money After Repair Value Loan Requirements for a Flip · Does a Hard Money Lender Cap Loan to Cost on a Flip?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- 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.