The Quick Read: There is no fixed down payment on a hard money loan, because the lender runs your deal through two or three leverage caps and you owe the gap between what the project costs and the smallest result. Borrower experience sets how high those caps go, and fees and rehab float add cash on top.
- Fix-and-flip loans are sized to project cost, tiered by completed projects, and always capped by after-repair value.
- Bridge purchases without rehab and refinances use lower, separate leverage limits.
- There is no true 100% purchase program, only 100% of the rehab budget released in draws.
- Fees, interest carry, and the first draw float are cash you bring beyond the down payment.
- Every figure varies by lender, property, and experience, and nothing here is a commitment to lend.
What Actually Sets the Down Payment?
The deal math sets it. A hard money lender lends against the property and the plan, so the down payment is the leftover after the lender applies its caps to your specific numbers. Two investors can bring different cash to the same house, and the same investor can bring different cash to two houses.
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.
That is why “how much down?” gets so many different answers. The honest answer is a formula, not a percentage.
The phrase “100% financing” shows the pattern. Nav explains that in hard money it means 100% of cost, not 100% of current value, and that the total still has to sit under the lender’s after-repair value cap. Lendmire is a mortgage broker that places these loans across 41 markets, including Washington, D.C. The brokerage sees the same pattern on file after file: the headline leverage number is a ceiling, not a promise of zero cash.
Key Terms Defined
After-repair value (ARV): The estimated value of the property once the planned renovation is finished.
As-is value: What the property is worth today, before any work.
Loan-to-cost (LTC): The loan as a share of purchase price plus rehab budget.
Loan-to-value (LTV): The loan as a share of the property’s appraised or estimated value.
Draw: A release of rehab money after the lender confirms a stage of work is done.
Float: The rehab money you pay out of pocket before a draw reimburses you.
BPO: A broker price opinion, a lender-ordered value estimate based on comparable sales, used instead of or alongside an appraisal.
How the Lender Gets to a Number, Step by Step
The sequence below is the same on nearly every fix-and-flip file, whatever the lender calls its program.
1. Value the collateral. The lender orders an appraisal or BPO. On a rehab it estimates both as-is value and ARV, using comparable sales and your scope of work.
2. Find the cost ceiling. Across the wholesale network Lendmire places files with, fix-and-flip loans commonly fund 85% of project cost with fewer than two completed projects, 90% with two or more, and 93% with five or more. Those are loan-to-cost figures on fix-and-flip loans, not purchase LTVs. They vary by lender, property, and experience.
3. Find the value ceiling. Every one of those tiers is also capped at 75% of ARV. This is the cap that surprises first-timers.
4. Take the lower result. The loan is the smaller of the cost ceiling and the ARV ceiling. Your down payment is total cost minus that loan.
5. Layer on non-financed costs. Lender fees and third-party costs such as title, insurance, and appraisal are generally paid in cash. Interest-only carry during the project is a cash need too.
6. Prove the cash. Lenders typically ask for recent bank statements showing the funds for the acquisition and the costs around it.
7. Fund the rehab in draws. Up to 100% of the rehab budget is available, but it is released against completed work. That figure is a share of the rehab budget, never a purchase LTV.
Three Deals, Three Different Cash Requirements
The inputs below are modeled assumptions, not market data. Each uses ratios so you can see which cap binds. Assume the rehab budget equals 20% of the purchase price, which makes total project cost 120% of price.
| Deal | ARV vs. price | Tier | Binding cap | Cash due |
|---|---|---|---|---|
| A: Solid margin | 150% | 85% of cost | Cost | 15% of cost |
| B: Thin margin | 110% | 85% of cost | ARV | About 31% of cost |
| C: Experienced | 150% | 93% of cost | Cost, barely | 7% of cost |
In Deal A, 85% of cost works out to 102% of price. The ARV cap of 75% is 112.5% of price. The cost cap is lower, so it binds.
In Deal B, the same borrower, the same budget, and the same tier produce a much larger check. The ARV cap of 75% falls to 82.5% of price, well under the cost ceiling. The ARV cap binds, so cash due rises to about 31% of cost before fees.
At 93% of cost, the cost ceiling is 111.6% of price, just under the ARV cap of 112.5%. Cash due is 7% of cost, and the ARV cap is nearly in play.
The lesson is simple. A thin spread between all-in cost and ARV is what pushes the down payment up, and no borrower tier overrides it. If the lender’s ARV comes in below yours, your cash due rises by the same logic, so build the budget on comps you can defend.
What Moves the Answer
Three groups of factors shift the result, and it helps to keep them separate.
Deal factors come from the numbers. These are the spread between cost and ARV, the size of the rehab compared with the property, and whether the plan is realistic. Lenders generally will not fund more in renovation than the property supports, so a scope that overshoots the ARV cap pushes cash upward.
Borrower factors set the tier. The top leverage is reserved for experienced investors with documented completed projects, and first-time investors qualify at the lower tiers. A credit score of 620 is the usual minimum, with additional conditions below 660. Underwriting stays asset-based, so the property, plan, and exit still carry the file. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Program factors depend on the loan type, which is where the next section picks up.
Where the General Rule Breaks
The cost-and-ARV formula holds for most flips. These cases bend it.
Bridge purchases without rehab. With no renovation, there is no cost-versus-ARV question. Across most files, leverage runs up to 80% of the purchase price. Expect 20% down as a starting point, plus fees.
Refinances. A refinance has no purchase down payment, only equity. Cash-out and rate-and-term refinances on a hard money loan generally run up to 65% of value, so the lender is measuring the equity you keep, not the cash you bring.
Below-value purchases. When the contract price sits well under as-is value, a lender that sizes on value instead of price may find the caps stop binding. Cash due can then shrink toward the fees and carry alone. It is a real outcome of the same math, not a loophole.
Cross-collateral. Some deals accept a lien on another property in place of part of the cash. Availability varies by lender and the second property has to qualify. If an LLC will hold title or supply the funds, lender program eligibility decides how those funds are treated.
Ground-up construction. Experienced builders with three or more completed projects can reach 90% of cost and 75% of completed value. New construction up to 10 units sits on a different sheet than a one-to-four-unit flip.
Quotes that move. A prequalified structure is subject to underwriting. Two brokers can quote very different structures on the same deal, and the number can change once the value comes back.
Business purpose. Hard money loans for non-owner-occupied investment property are business-purpose loans, which are reviewed differently from standard mortgages. The CFPB’s explanation of Regulation Z’s business-purpose exemption shows the test turns on the purpose of the loan, not just the property type. The OCC’s TILA handbook lists factors such as transaction size. The practical point is that no federal rule sets the down payment on an investor loan. The lender’s own risk caps do.
The Cash You Bring Beyond the Down Payment
The down payment is rarely the whole check. Plan for four more items.
- Fees and third-party costs. These are generally paid in cash, not rolled into the loan.
- Interest carry. Loans are interest-only for terms of roughly 6 to 18 months, so every month of the project has a carrying cost.
- The draw float. Rehab money comes after the work, so you usually fund the first stage yourself. Inspection and wire fees apply to each draw, and partial completion can mean partial payment.
- Reserves and proof of funds. Lenders look for liquidity beyond the closing number, and a thin balance can sink a file that clears every ratio.
The effective cash need is larger than the headline percentage. Many investors first see this when a term sheet’s cash-to-close line combines the down payment with origination fees.
What to Do Before You Call a Lender
Run this self-check first. It takes ten minutes and saves a bad surprise.
1. Write down purchase price, rehab budget, and a conservative ARV backed by recent comparable sales. 2. Compute total cost, then 75% of ARV, then your tier’s percentage of cost. The lower number is your likely loan. 3. Subtract that loan from total cost to get the down payment, then add fees, carry, and the draw float. 4. Count your completed projects honestly. Two and five are the tier breakpoints. 5. Confirm your score is at least 620 and that the property is a non-owner-occupied one-to-four-unit residence. 6. Plan the exit before the purchase closes. Loans are not designed to be held for years, so you need a sale or a refinance ready.
For rental investors, the exit is often long-term financing. Many investors refinance out of hard money into DSCR financing once the property is stabilized, and Lendmire brokers that path. The post-rehab value and rent have to support the refinance, and high leverage on the bridge does not guarantee the next loan pays it off. The complete DSCR loans guide explains how that coverage test works.
Tax treatment varies; consult a qualified professional.
If you are buying, rehabbing or refinancing an investment property 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.
Frequently Asked Questions
Can I get a hard money loan with no money down?
Not on the purchase itself. There is no true 100% purchase program. The closest structure funds up to 100% of the rehab budget in draws, and the top cost-based tier is reserved for experienced investors. Even then, fees, carry, and the draw float need cash.
Does the lender use purchase price or ARV to set my down payment?
Both, and the lower result wins. Fix-and-flip loans are sized to project cost by tier and capped at 75% of ARV. A strong spread leaves the cost tier in charge, while a thin spread lets the ARV cap take over.
How much does experience change the cash I owe?
It changes the tier. Fewer than two completed projects typically means 85% of cost, two or more means 90%, and five or more means 93%. Terms vary by lender, property, and experience.
What if the lender’s ARV comes in lower than mine?
The loan shrinks and your cash due grows. The ARV cap is a hard ceiling, so a lower value cuts the amount you can borrow even if your cost ceiling is higher. Support your estimate with recent comparable sales before you apply.
Is the down payment different on a refinance?
Yes. Cash-out and rate-and-term refinances on hard money loans generally run up to 65% of value, so the lender is measuring how much equity stays in the property.
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. Lendmire’s piece How a Hard Money Lender Counts Equity as a Flip Down Payment shows how equity can change the cash you bring.
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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. Nav: Hard Money Loans and 100% Financing
2. CFPB: Regulation Z, Section 1026.3
3. OCC: Truth in Lending Act Comptroller’s Handbook
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 a Hard Money Lender Counts Equity as a Flip Down Payment · Hard Money Down Payment vs HELOC Draw for an Investor Purchase · How Hard Money Lenders Count a Self-Employed Borrower’s Down Payment
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.