The Quick Read: A flip lender funds the smaller of two numbers: a share of total project cost that rises with your track record, and a hard cap of 75% of the finished home’s after-repair value, with the rehab portion released in draws as work is inspected and completed. Every figure below varies by lender, property, and experience, and none of it is a commitment to lend.
- Loan-to-cost tiers on the program Lendmire places most flip files with: 85% of project cost with fewer than 2 completed projects, 90% at 2 or more, and 93% at 5 or more.
- Every tier is capped at 75% of after-repair value, and the lower result sets the loan.
- Up to 100% of the rehab budget can fund, but it arrives in draws against completed work, not at closing.
- A bridge purchase with no rehab funds up to 80% of purchase price. A refinance funds up to 65% of value.
- You bring the gap between the loan and total cost, plus closing costs and carry.
What Is a Hard Money Bridge Loan on a Flip?
It is short-term, interest-only financing secured by the investment property, sized on the deal rather than your personal income. The word “bridge” carries the idea: short-term, collateral-backed financing that is repaid when permanent financing or a sale arrives. Bridge financing is temporary and costs more than long-term money, because the lender takes on more risk for a shorter period.
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 vocabulary is messy. People use “hard money,” “bridge,” and “fix-and-flip loan” for overlapping things. Here is how the brokerage sorts them.
- Hard money describes the source: private or non-bank capital that lends against the asset.
- Bridge describes the function: it carries you from purchase to your exit.
- Fix-and-flip loan describes the product: a bridge loan with a rehab holdback attached.
- Bridge purchase is the same loan with no rehab money, for a property that needs little work.
Some people also use “bridge” for a second loan that takes out a flip loan when the house has not sold. This article covers the first meaning: the loan that buys and rehabs the property.
The network works with non-owner-occupied residential property, one to four units, and loan sizes up to $5,000,000, larger by exception. Terms run 6 to 18 months, interest-only, with no prepayment penalty. Underwriting is asset-based: the property, the plan, and the exit matter most. Credit still counts, with a 620 minimum score and additional conditions below 660. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
What Gets Funded at Closing Versus Later?
The purchase portion funds at closing. The rehab portion is held back and released in draws as work is completed and inspected. You front contractor costs, submit a draw request with invoices, and the lender releases funds after an inspection confirms the work.
That sequence trips up new flippers. “Up to 100% of the rehab budget” sounds like the lender covers the repairs. It does, but only as reimbursement. Between draws, your cash or credit with contractors carries the project.
Think of a flip loan as three pieces:
| Piece | Who funds it | When |
|---|---|---|
| Purchase advance | Lender, as a share of cost | At closing |
| Rehab holdback | Lender, up to 100% of budget | In draws after inspection |
| The gap | You | At closing, plus fees and carry |
Exactly how a lender splits the percentage between purchase and rehab varies. Ask for the split in writing before you compare offers.
The Two Tests: Cost and After-Repair Value
Every flip loan is sized twice, and the lower answer wins. The first test is loan-to-cost: the lender takes purchase price plus rehab budget and applies a percentage. That percentage is 85%, 90%, or 93% on this program, depending on how many projects you have documented as completed.
The second test is the after-repair value cap. After-repair value, or ARV, is what the finished house should be worth. The lender takes that value and applies 75%. An appraiser typically sets the ARV by weighing the as-is condition, the planned work, and comparable sales.
Underwriters are careful about which value they use. Appraisal practice separates value on an as-is basis from value on an as-completed basis, and the lender sizes a loan on its own underwriting value. In flip lending, that means the purchase side leans on what the property is worth today, and the ceiling leans on what it will be worth finished.
Do not confuse the two ratios. Loan-to-value (LTV) compares the loan to a property’s value. Loan-to-cost (LTC) compares the loan to what you are spending. A lender quoting “90%” without naming the base is telling you almost nothing. Always ask whether the percentage applies to cost, purchase price, as-is value, or ARV.
Worked Example One: A Normal Spread
Every dollar figure here is withheld on purpose. Index the ARV to 100. These are modeled assumptions, not market data.
- Purchase price: 58 index units.
- Rehab budget: 18 index units.
- Project cost: 76 index units.
- ARV: 100 index units.
At the 90% tier, the cost test gives 68.4 units. The ARV test gives 75 units. Cost is lower, so the loan is 68.4 units, and you bring 7.6 units plus closing costs. That gap is exactly 10% of project cost.
Run the same deal at the other tiers. At 85% of cost, the loan is 64.6 units, so you bring 11.4. At 93% of cost, the loan is 70.68 units, so you bring about 5.3. Here experience changes your cash in, because the ARV cap sits well above every cost-based answer.
Worked Example Two: A Thin Spread
Now squeeze the margin, still indexing ARV to 100.
- Purchase price: 70 index units.
- Rehab budget: 20 index units.
- Project cost: 90 index units.
- ARV: 100 index units.
At the 90% tier, the cost test gives 81 units. The ARV cap says 75. The cap binds, so the loan is 75 units and you bring 15 units, which is about 16.7% of project cost. Even at 85%, the cost test gives 76.5, and the cap still wins.
Here is the lesson. Once project cost climbs high enough against ARV, experience stops mattering. The crossover points are easy to compute:
| Tier | Cost test equals ARV cap at |
|---|---|
| 85% of cost | Cost near 88% of ARV |
| 90% of cost | Cost near 83% of ARV |
| 93% of cost | Cost near 81% of ARV |
Above those ratios, the 75% ARV cap sets the loan, and your cash in rises dollar for dollar. An investor who shops for the highest advertised percentage can discover too late that the cap made it irrelevant.
Many investors screen deals by keeping project cost near 70% of ARV. That leaves room for profit, overruns, and carry, and it keeps the deal well below the crossover points above. Thin margin is also the quickest route to a deal that only works if nothing goes wrong.
How Experience Changes What Gets Funded
Lenders sort flip borrowers by documented completed projects. The fewer you have, the less of the cost the lender will advance.
| Completed projects | Loan-to-cost | ARV cap |
|---|---|---|
| Fewer than 2 | 85% of project cost | 75% of ARV |
| 2 or more | 90% of project cost | 75% of ARV |
| 5 or more | 93% of project cost | 75% of ARV |
Ground-up construction runs on its own tier: up to 90% of cost and 75% of completed value at 3 or more completed projects. First-time investors qualify, but at the lower leverage tiers. The top tier is reserved for experienced investors, and it varies by lender, property, and experience.
Credit works alongside track record. A 620 score is the floor, with extra conditions below 660. A stronger score rarely overrides a thin track record, and a long track record rarely overrides a weak ARV.
The Real Cash-to-Close Stack
The loan is never the whole check you write. This table lays out what the lender covers and what stays with you.
| Item | Covered by the loan? |
|---|---|
| Purchase price | Partly, as a share of cost |
| Rehab budget | Up to 100%, released in draws |
| Gap between loan and cost | No, you fund it |
| Closing costs and fees | No, varies by file |
| Interest during the hold | No, paid as it accrues |
| Cash to carry contractors between draws | No |
The line people underestimate is the last one. Draws reimburse completed work, so a heavy rehab means you front real money each phase. Interest-only payments run for the whole term, and a delay in the schedule adds to them. A reserve for overruns belongs in your plan, though a lender’s reserve requirements vary. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
The 100% Financing Claim
The headline claim is that a flip can be funded at 100%. It sounds like zero down. It rarely is. Nav’s comparison of hard money lenders reports advertised leverage that varies widely across lenders, alongside full coverage of rehab costs and an after-repair value cap. Those are market-wide advertised figures, and the network’s program works within the tiers above, where any cost-based leverage is measured against project cost and the ARV cap still limits the total loan.
In practice, “100%” almost always means the rehab, and it arrives as reimbursement. There is no true 100% purchase program. Where a lender stretches further, it usually wants cross-collateral or extra cash somewhere else in the deal. When the ARV cap binds, no tier can close the gap.
Where the General Rule Breaks
The two-test rule covers most flips, with these exceptions.
The cap binds on thin deals. Covered above. If cost runs high against ARV, the 75% cap controls and your cash in rises.
The base changes the answer. Some lenders apply their percentage to purchase price, others to as-is value, others to ARV. Compare offers on the same base, or the percentages mislead.
A bridge purchase with no rehab has no holdback. It funds up to 80% of purchase price. With no repairs to finance, there are no draws and no ARV cap to model. Lendmire’s piece Is a Hard Money Bridge Loan Worth It for Flip Investors? covers when that structure fits.
A refinance is sized differently. Cash-out and rate-and-term refinances on an owned property fund up to 65% of value, with no draws. Do not model a refinance at purchase-loan leverage. It is a different tier.
Heavy rehab strains your cash. Since rehab reimburses after inspection, a big scope means fronting a lot of cost before each draw lands.
Some property types are not offered. Commercial, industrial, land or lots, hospitality, and owner-occupied properties are not on this program. It is 1-to-4-unit residential, with ground-up construction up to 10 units.
Bridge Loan or Flip Loan?
The choice depends on how much work the property needs. If you are buying a house that needs paint and light repairs, a bridge purchase with no holdback may be enough, at up to 80% of purchase price. If the scope is large, the flip structure lets the lender reimburse rehab through draws, with total funding capped at 75% of ARV.
| Factor | Bridge purchase | Flip loan |
|---|---|---|
| Rehab money | None | Up to 100% in draws |
| Purchase sizing | Up to 80% of price | 85-93% of project cost |
| ARV cap | Not modeled | 75% of ARV |
| Best for | Light or no rehab | Real renovation |
What the Decision Looks Like in Practice
Start with the exit, not the loan. A flip exits by sale. A rental play exits by refinance. Many investors refinance out of hard money into long-term DSCR financing once the property is stabilized, and Lendmire brokers that path. A refinance is sized on stabilized value and rent, so check your numbers against that exit before you commit. The complete DSCR loans guide explains how that second loan is sized.
Then work through these steps with a lender or broker:
1. Count your documented completed projects to find your tier.
2. Compute project cost: purchase plus rehab.
3. Run the cost test at your tier’s percentage.
4. Run the ARV test at 75% of a defensible ARV.
5. Take the lower number, and subtract it from total cost to find your gap.
6. Add closing costs, interest carry, and a cushion for fronting draws.
If the cash you need is more than you can comfortably carry, the fix is rarely a better lender. It is a lower purchase price, a smaller scope, or a different deal. Tax treatment varies; consult a qualified professional.
Key Terms Defined
After-repair value (ARV): what the property should be worth once the planned work is finished.
As-is value: what the property is worth today, in its current condition.
Loan-to-cost (LTC): the loan divided by purchase price plus rehab budget.
Loan-to-value (LTV): the loan divided by a property’s appraised or estimated value.
Holdback: the rehab money the lender keeps back and releases in stages.
Draw: one release of holdback funds, paid after an inspection confirms completed work.
Interest-only: payments cover interest during the term, and the balance is repaid at the end.
Frequently Asked Questions
Does a hard money bridge loan cover my rehab costs?
Yes, up to 100% of the rehab budget on the network’s flip program. The money is held back and released in draws after inspections. You front each phase, then get reimbursed.
Can I buy a flip with nothing down?
Not on this program. Purchase leverage tops out at 93% of project cost for the most experienced tier, and every tier is capped at 75% of ARV. You bring the gap plus closing costs. A thin spread widens the gap.
Can the loan be sized on ARV alone?
No. ARV is a ceiling, not a base. The lender runs the cost test and the ARV test, and the lower result controls. Credit and experience also influence the tier you get.
How does a first flip differ from a repeat flip?
First-timers qualify, but at lower leverage, 85% of project cost with fewer than 2 completed projects. Two or more projects reach 90%, and five or more reach 93%. On thin-margin deals the ARV cap erases that difference.
What if the rehab runs over budget?
The holdback is sized to the approved budget, so overruns are typically yours to fund. Build a cushion into your cash plan. A tighter scope and a realistic contractor bid reduce the risk.
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 arranges these loans through select lenders in its wholesale network across 41 markets, including Washington, D.C.
The deals that survive are the ones where the 75% ARV cap, not the advertised percentage, is the number you planned around from day one.
To see how flip-loan sizing compares with a mortgage built on 1099 income, read Lendmire’s piece How Much Hard Money Lends on a Flip Versus a 1099-Only Mortgage.
About Lendmire
As a non-QM mortgage broker (NMLS# 2371349), Lendmire facilitates DSCR investor loans across 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income instead of personal income documentation, subject to lender guidelines, serving LLC-structured portfolios and self-employed borrowers who don’t fit conventional boxes. A two-time Scotsman Guide Top Mortgage Workplace (2025, 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. Corporate Finance Institute: What Is a Bridge Loan
2. Nav: Hard Money Loans with 100% Financing
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 Flip Loan Documentation for an Online Approval · How Much Hard Money Funds on a Six-Unit Rehab · Can You Get a Hard Money Bridge Loan on a Condo Rental?
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
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.