The Quick Read: The lender sizes the loan first, and your down payment is whatever the purchase price leaves over. Most of the number comes from one leverage cap, and the condo building can lower it but never raise it.
- On a bridge purchase with no rehab, the network commonly lends up to 80% of the purchase price, so the down payment starts near 20%.
- On a fix-and-flip, the cap is a share of total project cost (85%, 90% or 93% by experience), and it never exceeds 75% of after-repair value.
- On a refinance, leverage runs up to 65% of value, so you keep at least 35% equity in the unit.
- A building with litigation, thin reserves or heavy investor ownership can lower leverage. It never raises it.
- All figures vary by lender, property, and experience, and none is a commitment to lend.
What Is the Lender Actually Sizing?
A hard money lender sizes the loan against the collateral, and your down payment is the gap between that loan and what you pay. Credit and income count for less than they do at a bank. The lender asks what the condo is worth, what it costs you, and how you plan to get out.
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 the down payment is the mirror image of the leverage cap. At 80% of purchase price, you bring the other 20%. At 65% of value on a refinance, you leave 35% in the property. The lender never sets a down payment directly. It sets a maximum loan, and you cover the rest.
Condo bridge loans are short-term, interest-only loans on non-owner-occupied residential units. Across the wholesale network Lendmire works with, terms run 6 to 18 months with no prepayment penalty. They are business-purpose loans for investors, and they are underwritten on the asset, the plan, and the exit. Loan amounts go up to $5,000,000, with larger loans by exception.
The Step-by-Step Sizing Order
The lender runs the same sequence on almost every file, and knowing it lets you predict your cash need before you ask.
1. Submit the deal. That means the purchase contract, the rehab scope and budget (if any), comps, and your entity details.
2. The lender establishes value. It uses an appraisal or broker price opinion for the as-is value. With a rehab, it also estimates after-repair value.
3. The building gets its own review. The condo is more than a unit. The lender looks at the whole project.
4. The caps are applied. The lender takes the lowest loan amount the caps produce.
5. The down payment falls out. It is the purchase price minus the loan.
6. You show proof of funds. That covers the down payment and reserves, and often a written exit plan.
7. The exit is tested. For a rental, that usually means refinancing into longer-term financing.
On a rehab deal, two caps work together: one against total cost, one against after-repair value. The tighter one wins. Say you buy a unit cheaply and plan heavy renovations. The cost cap might allow a big loan, but the value cap can pull it back. Your cash need follows whichever cap binds.
How the Numbers Differ by Deal Type
Leverage figures in the network depend on what you are doing with the condo. Experience moves them too.
| Deal type | What the loan is sized on | Typical network leverage |
|---|---|---|
| Bridge purchase, no rehab | Purchase price | Up to 80% of price |
| Fix-and-flip | Total project cost, capped by ARV | 85% / 90% / 93% of cost; 75% of ARV max |
| Rate/term or cash-out refinance | Current value | Up to 65% of value |
| Rehab budget | Completed work, paid in draws | Up to 100% of the rehab budget |
Those flip tiers depend on documented completed projects. Fewer than 2 completed projects lands at 85%. Two or more reaches 90%. Five or more reaches 93%. Every tier stays under the 75% after-repair-value ceiling. The top tier is reserved for experienced investors, and each figure varies by lender, property, and experience.
Two details trip up first-timers. First, the rehab-budget line is not a purchase LTV. Funding the renovation in draws against completed work does not mean the purchase is financed at 100%. Second, there is no true 100% purchase program. A “zero down” claim usually means a strong deal, a seasoned borrower, and a lender folding some costs in. Treat it as the exception.
What the Condo Building Does to Your Number
The building review can lower your leverage after you have already paid for an appraisal. It does not raise it. Lenders treat the project as part of the collateral, so a weak building means a weaker collateral cushion.
Per Scotsman Guide, a condo review looks at HOA litigation, whether reserves are adequate, and the split between owner-occupied and non-owner-occupied units. The usual document pile includes HOA financials and budget, reserve documentation, meeting minutes, insurance certificates, and disclosure of special assessments.
| Building factor | Effect on your leverage |
|---|---|
| Pending HOA litigation | Can lower leverage or stall the deal |
| Thin reserves or special assessments | Can lower leverage |
| High share of investor-owned units | Can lower leverage, depending on lender |
| Healthy reserves, high owner-occupancy | Usually leaves the base cap intact |
Across a network of lenders, the pattern is consistent. A clean building gets the base cap. A flagged building gets the base cap or something lower. No building review produces extra leverage.
My advice is simple: ask for the project documents early. Pay for the appraisal only once the building looks clean. Many surprises on condo files come from the building, not the unit.
Where the General Rule Breaks
The 80% purchase cap is a starting line, and several situations move it.
Experience. Track record changes leverage on rehab deals, as the tier table shows. A first-time investor qualifies at the lower leverage tiers. The credit floor in the network is a 620 score, with added conditions below 660. Underwriting stays asset-based, though, so a strong deal matters more than a high score.
Non-warrantable buildings. Warrantable and non-warrantable are agency terms for whether a condo project meets certain mortgage-purchase standards. Hard money lenders run their own building tests. Scotsman Guide’s investor coverage of condo financing notes that DSCR programs reach both warrantable and non-warrantable condos. Hard money works the same way: a building that fails agency standards is not automatically ineligible. It may simply get lower leverage.
Agency changes do not rewrite your file. Fannie Mae’s Lender Letter LL-2026-03 retired its Limited Review process. A Michigan condo law blog reports that the agency dropped its 50% investor-concentration cap for established condos under full review. It adds that individual lenders may keep their own limits, and single-investor limits remain. That is contrast only. Private lenders and DSCR lenders set their own project tests, so an older rule disappearing at the agencies does not loosen your bridge loan.
Cross-collateral. Some lenders will take a second property you own free and clear as added collateral. That can substitute for cash down. It also puts another asset at risk, so weigh it honestly.
Hotel-style buildings. Condotels and units with hotel-style operations draw extra scrutiny. Expect lower leverage or ineligibility. Collateral limits matter here: the network lends on 1-4 unit non-owner-occupied residential, and hospitality and owner-occupied property are not offered.
Down Payment Is Not Total Cash
Your down payment is only one line in the cash you need. Reserves, closing costs, and interest carry sit on top. Many investors budget the down payment and forget the rest.
Plan for these:
- Down payment: purchase price minus the loan.
- Fees and closing costs: these vary by lender and file.
- Interest carry: the loan is interest-only, so you pay interest every month through the term.
- Rehab float: draws reimburse completed work, so you often fund the early work first.
- Reserves and proof of funds: the lender verifies you hold the cash.
The draw structure is the one most people miss. Up to 100% of the rehab budget can fund in draws against completed work. That does not mean you start with no cash. It means the budget is eligible for reimbursement as work gets done.
Why the Exit Plan Affects Your Cash
A bridge loan is temporary, so the lender cares what happens at the end. A weak exit can lower leverage even when the collateral looks fine. Most condo investors exit by selling or refinancing into long-term rental financing.
Many investors refinance out of hard money into a long-term DSCR loan once the unit is stable, and Lendmire brokers that path. DSCR is the debt service coverage ratio. It compares rent to the full monthly obligation: principal, interest, taxes, insurance, and HOA dues. A condo with a high HOA assessment can show weaker coverage than the rent suggests. Clearing 1.00 is also not the same as positive cash flow, because repairs, vacancy, and management sit outside the calculation.
Test the exit before you buy. If the building’s dues would weaken coverage at refinance, you want to know that while you can still change the deal. Lendmire’s complete DSCR loans guide walks through how that test works.
This article covers how the number gets built.
Key Terms Defined
Loan-to-value (LTV): the loan amount divided by the property’s appraised value.
Loan-to-cost (LTC): the loan amount divided by your total cost, including the purchase and the renovation.
After-repair value (ARV): the lender’s estimate of what the condo will be worth once the work is finished.
Draw: a payment released to you after a stage of rehab work is completed.
Cross-collateral: pledging a second property alongside the condo so the lender has more security.
Reserves: cash you hold after closing, which the lender may ask you to document.
Common Mistakes
- Quoting the wrong ratio. Lenders use LTV and LTC differently. Always confirm which one a quoted percentage means.
- Assuming a low price means instant equity. In a purchase bridge loan, the lender generally treats your purchase price as the value.
- Ordering the appraisal before the building documents. A flagged building can lower leverage after you have paid for the valuation.
- Treating the rehab line as purchase financing. Draws reimburse finished work. They do not fund the purchase.
- Skipping the exit math. A bridge that works but a refinance that does not is a bad deal.
Before You Ask for a Quote
Gather these first, and the lender can size the file faster and more accurately:
- The purchase contract and a clear price
- Rehab scope and budget, if any
- HOA financials, reserve data, and any litigation or special-assessment notice
- Proof of funds for the down payment and reserves
- Your entity details and a short list of completed projects
- A written exit plan, including expected rent if you plan to refinance
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. Many condo associations restrict rentals, and that affects both the exit and the building review.
Frequently Asked Questions
Can I get a condo bridge loan with no money down?
Not as a program. There is no true 100% purchase structure. Purchase leverage on a no-rehab bridge tops out around 80% of price in the network. Seasoned investors can reach higher shares of project cost on a rehab, and the rehab budget can fund in draws. That is not the same as owning the unit for nothing.
Does a first-time investor put down more?
Usually, yes. Leverage by project cost tiers with completed projects: 85% with fewer than 2, 90% with 2 or more, and 93% with 5 or more. First-time investors qualify at the lower tiers. The credit minimum is a 620 score, with additional conditions below 660. All of this varies by lender, property, and experience.
Will an HOA problem change my down payment?
Yes, it can. Pending litigation, thin reserves, special assessments, or heavy investor ownership can lower the leverage a lender will offer. A building issue can also end the deal. It will not raise leverage.
Can equity in another property count toward the down payment?
Sometimes. Some lenders accept additional collateral such as a free-and-clear property. That can reduce cash needed, but it puts the second property on the line. Eligibility varies by lender and file.
Does the down payment cover closing costs and reserves?
No. The down payment is the purchase price minus the loan. Fees, interest carry, reserves, and early rehab costs are separate cash needs.
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 its wholesale network, across 41 markets including Washington, D.C. Programs change, every file is underwritten individually, and nothing here is a commitment to lend.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage built around DSCR investor lending, with programs available in 41 markets, including Washington, D.C. DSCR lenders commonly evaluate rental-income coverage instead of personal income paperwork — a practical fit for LLC-owned and multi-property investors. Terms vary by lender, property, leverage, and program. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Scotsman Guide, “Get in the Game”
2. Scotsman Guide, “Invest in Your Future”
3. Fannie Mae Lender Letter LL-2026-03
4. Michigan Community Association Law Blog
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Hard Money Bridge vs Private Money Down Payment for an LLC Buyer · Can You Borrow Enough on a Hard Money Loan to Flip a Condo? · How a First-Time Flipper Can Qualify for a Lower Hard Money Down Payment
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
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.