The Quick Read: Within six months of buying, the best program is the one that matches how the lender measures value: most size a cash-out loan on the lower of appraisal or cost basis until the title seasons, and your price, rehab spend, and exit plan decide which fits. A payoff-only refinance is usually open early, while cash back to you is where the waiting rules bite. The best program for your situation depends on your numbers, not on a headline.
- Paying off the hard money loan with nothing extra to you is usually available early. Cash back to you is what triggers the wait.
- About six months of seasoning is the common expectation on cash-out across most of our wholesale network, and a few programs differ.
- Inside the window, the loan is usually sized on the lower of appraised value or cost basis.
- Coverage is a second, separate test: more cash-out means a bigger payment and a thinner debt service coverage ratio (DSCR).
- Plan the exit before you close the purchase, because the hard money note has a maturity date and the seasoning clock does not care about it.
Lendmire is a mortgage broker. It does not lend. It shops a network of wholesale lenders and matches your scenario to the program that fits. The mechanics below come from placing these files every day.
Key Terms Defined
Hard money loan: a short-term, interest-only loan secured by the property and sized on the asset, the plan, and the exit. Terms on the current hard money program run 6-18 months, with no prepayment penalty.
Seasoning: the waiting period a lender wants between buying a property and letting you take cash out of it.
Cash-out refinance: a new loan that pays off the old one and puts extra cash in your pocket.
Payoff-only refinance: a new loan that covers the old balance and closing costs, with no cash back to you. Lenders also call it rate-and-term.
Cost basis: what you paid for the property plus the documented cost of improvements.
DSCR (debt service coverage ratio): monthly rent divided by the full monthly obligation: principal, interest, taxes, insurance, and any association dues.
Delayed financing: an agency exception that lets some cash buyers take cash out right after purchase. More on that below.
How Does the Six-Month Window Actually Work?
Seasoning is lender policy, not a law. Each program sets its own rule, which is why you hear none, three months, and six months from different lenders. About six months is the common expectation across most of our network.
The clock normally starts when the deed records in your name. Funding the hard money loan does not start a separate clock. Lenders also disagree on the end date. Some measure to your application date and others to the closing date, so ask which one applies before you plan around a calendar.
Here is the part most investors miss. The window affects what the lender counts as value, not just whether you can borrow.
- Inside the window: many programs use the lower of the appraisal or your cost basis, meaning purchase price plus documented renovations.
- After the window: the lender uses full appraised value.
So a rehab that lifted the property well past what you spent does not necessarily raise your proceeds early. An improvement may support a higher appraised value, depending on comps and underwriter review, but the early loan may ignore that lift entirely.
One more split matters. If the new loan only pays off the hard money balance and costs, seasoning usually does not apply, because it targets cash-out. Any dollar that lands in your hands makes the file a cash-out.
Your Four Paths Inside Six Months
You have four realistic options. Which one fits depends on how the hard money note is structured and how much cash you need back.
| Path | What you get | What it requires | Who it fits |
|---|---|---|---|
| Payoff-only exit | Old loan retired, no cash back | Rent coverage, credit, reserves | Investors who just need longer-term financing |
| Cost-basis cash-out | Cash up to the cost-basis limit | Documented purchase and rehab costs | Buyers who need some cash early |
| Delayed financing | Cash back on a cash purchase | Purchase not secured by the property | Cash buyers, rarely hard money buyers |
| Wait, then full-value cash-out | Cash sized on appraised value | Seasoning met, note still open | Strong rehabs with room on the maturity |
Two costs hide in that table. A payoff-only refinance now followed by a cash-out later means paying closing costs twice. Waiting means carrying the hard money interest for longer and facing the maturity date.
A fifth option exists for tight timing: another bridge loan. The current hard money program offers cash-out and rate-and-term refinances up to 65% of value, with terms of 6-18 months. That buys runway but not a long-term exit, and it is a different product from the long-term loan discussed below. All hard money figures vary by lender, property, and experience.
Does Delayed Financing Work After a Hard Money Purchase?
Almost never. Delayed financing was built for cash buyers, and a hard money loan is not cash.
The current guide keeps that exception inside its cash-out rules. All other cash-out requirements and cash-out pricing still apply.
The catch for you is the funding source. The exception requires that the purchase money was not secured by the subject property. A hard money loan is secured by the property, so it generally disqualifies the purchase. Money pulled from an unsecured source or from a different asset is a separate question.
This is agency contrast only. Those rules do not set seasoning on investor loans, and a lender who tells you they do is blurring two different things. Proceeds under the exception are also tied to documented cost, so it never reaches after-repair value.
How Underwriting Treats the File, Step by Step
Underwriting a refinance this early is mostly arithmetic plus paperwork. Here is the order a lender works in.
1. Classify the loan. Payoff-only or cash-out. This sets whether seasoning applies.
2. Set the value basis. Lower of appraisal or cost basis inside the window, appraised value after.
3. Apply the leverage cap. Across most of our network, a cash-out on a standard rental tops out around 75% LTV (loan-to-value, the loan as a share of the property’s value). On short-term-rental collateral, cash-out is capped at 70%. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
4. Size to the rent. The lender takes the lesser of the value-based limit and the limit the rent supports, then subtracts the old payoff and costs.
5. Check coverage. Monthly rent divided by the full monthly obligation. A 1.00 ratio is where select programs start, and stronger ratios open better pricing and leverage. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted.
6. Check credit and reserves. A 620 floor exists in parts of the network, most programs want around 660, and 700+ unlocks the strongest leverage tiers. Reserves vary by lender, leverage, loan size, and transaction type. Around 6 months of PITIA (principal, interest, taxes, insurance, and association dues) is common.
Clearing 1.00 does not mean the property cash flows. Repairs, vacancy, management, utilities, and capital expenses all sit outside the calculation. DSCR compares rent to the monthly obligation and nothing else.
These are business-purpose investor loans, reviewed differently from a standard owner-occupied mortgage. Qualification runs primarily on property-level rental income covering the payment, subject to lender guidelines. Loans to LLC-titled borrowers are available subject to lender program eligibility.
The standard DSCR loan runs up to $3,000,000 on standard programs (smaller balances available through select lenders). The long-term structure is built around a 30-year fixed term. Extended terms and interest-only periods are available through select lenders in the network. Property types such as manufactured homes, log homes, and barndominiums are not offered. For the full picture, see Lendmire’s complete DSCR loans guide.
Worked Example: Early at Cost Basis vs. Waiting for Appraisal
Here is one deal shown both ways. These are modeled assumptions, not market data, and they use index units instead of dollars so the proportions are easy to see.
Say you buy a property at 100 units. You spend 20 units on documented renovations, so your cost basis is 120. An appraisal after the rehab comes in at 140. Assume the bridge balance plus accrued interest and fees sits near 102, roughly the 85% of project cost tier for an investor with fewer than two completed projects.
- Refinance early at cost basis: 75% of 120 is 90. That is short of the 102 payoff, so you would bring cash to closing instead of taking any out.
- Refinance after seasoning at appraised value: 75% of 140 is 105. That covers the payoff with only a small amount left before closing costs.
The trade is plain. Early money costs you the gap between those two bases. Waiting costs more bridge interest and exposes you to the maturity date. Neither answer is right in general.
Coverage can also change the picture. Rent that clears 1.00 at the early, smaller loan may land lower once the loan grows to the appraised-value size. A bigger loan means a bigger obligation against the same rent. The strongest files clear both tests: enough equity and enough rental coverage. A larger down payment can lift DSCR, but it never erases leverage caps, credit floors, reserve rules, or property eligibility.
How to Pick the Best Program for Your Situation
No single program wins for every investor. The lenders that write this kind of loan differ on a handful of points, and a broker that sees many guidelines can map your file against them. This is the scorecard to use.
| Criterion | What to ask | Why it matters |
|---|---|---|
| Seasoning basis | Clock runs from deed, application, or closing? | Moves your earliest date |
| Value basis | Cost basis or appraisal inside the window? | Sets early proceeds |
| Leverage cap | What LTV on cash-out for your property type? | Sets maximum loan |
| Reserves | How many months, and on what loan size? | Absorbs part of proceeds |
| Property and entity | Is your property type and title structure eligible? | Can rule a program out |
| Coverage floor | What ratio does the program require? | Determines sizing |
Run your file through that list before you compare anything else. A program with generous leverage that measures seasoning to closing may lose to a stricter one that measures to application, simply because of when your hard money note matures.
An experienced eye matters here. In files like this, the surprise is almost never the headline leverage number. It is usually the value basis or the clock definition, and both are easy to overlook until the appraisal arrives. Ask for both in writing before you commit.
The honest read: the best program for your situation usually comes down to timing and property type, not to a single advertised figure.
Aligning the Hard Money Maturity With the Clock
Hard money terms run 6-18 months, and the seasoning window can eat a large share of a short one. If the note is shorter than the combined wait plus the time to process a new loan, you can end up in trouble.
Work backward from the maturity date. Build in a buffer for the appraisal, the underwriting review, and any title issue that appears. Then compare three fallbacks.
- Extension: extra interest and possibly an extension fee.
- Payoff-only now: retires the bridge but means two sets of closing costs if you cash out later.
- Cash-in at closing: bringing money to cover a payoff the loan cannot reach.
If the property is stabilized and you want longer runway, many investors refinance out of hard money into long-term DSCR financing, and Lendmire brokers that path. The long-term financing is a separate loan with its own qualification, so the decision belongs in your plan at purchase.
What Can Go Wrong
Most problems come from five places.
Appraisal short of payoff. The loan may not cover the hard money balance, so you need cash-in, an extension, or a sale.
Exit fees. Check the payoff statement for accrued interest and any extension or exit fees before you size the new loan. The current hard money program carries no prepayment penalty, but individual notes vary.
Reserves. Proceeds can get absorbed by the reserve requirement, which varies by lender, leverage, and loan size.
Liens and title. Junior liens, contractor liens, and entity titling problems can stall a file.
Thin coverage. Rent that looked fine at the early loan size can slip once the loan grows.
Document everything as you go. A lender will want these.
- The hard money payoff statement, including accrued interest and fees.
- The settlement statement proving purchase price and date.
- Rehab receipts and draw records to support cost basis.
- A lease and an appraisal, often with a rent schedule for the income test.
- Entity documents if the property is titled in an LLC.
Which Path Fits You?
The hard money flipper who now wants to hold. Your rehab is complete and rented, and the goal is permanent financing. A payoff-only DSCR loan is usually open early. If you need cash back too, the window decides how much.
The BRRRR holder. You buy, rehab, rent, refinance, repeat. Your plan lives or dies on the value basis, so choose the buy-side lender and the refinance lender together, before closing the purchase. Keep draw and rehab records from the first day.
The cash buyer. This is the only profile where delayed financing may apply, and it is a conventional route.
Short-term rental collateral follows different numbers: cash-out tops out at 70%, with a 640+ score and about 12 months of hosting history typical. 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.
Frequently Asked Questions
Can I refinance before six months?
Yes, if the new loan only pays off the hard money balance and costs. That kind of payoff-only refinance generally has no seasoning restriction. Taking cash back is different, because most programs apply the wait to cash-out. A few shorten it for documented rehabs, so ask each program.
Does hard money count as cash-out when I refinance it?
Only if cash comes back to you. Paying off the hard money loan and closing costs is a payoff-only refinance. Any amount above that makes it a cash-out, and seasoning rules apply to that portion.
Which date starts the seasoning clock?
The deed recording date, in most cases. The hard money funding does not start its own clock.
Is waiting worth it?
It depends on the gap between cost basis and appraised value against the carry cost. A large rehab lift favors waiting if the note has room. A small lift or a short maturity favors refinancing early, because the extra cash does not justify the extra interest and risk.
What if my hard money note matures first?
You have three fallbacks: extend the note, refinance payoff-only now, or bring cash to closing. Each has a cost. Plan the buffer at purchase, not at maturity, because an appraisal or title delay can push past the date.
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. Hard money programs are available in 41 markets, including Washington, D.C.
Buy the property with the refinance date already on the calendar, because the investors who keep their proceeds are the ones who sized the exit before they signed the purchase contract.
About Lendmire
Lendmire (NMLS# 2371349), a non-QM mortgage broker serving investors in 41 markets including Washington, D.C., helps structure DSCR scenarios commonly evaluated around a property’s rental income rather than personal income paperwork, subject to lender guidelines. A Scotsman Guide Top Mortgage Workplace in 2025 and 2026, Lendmire places loans through wholesale investor lenders and is not a direct lender.
Get Started
Ready to find the right loan for you?
See your offer in seconds. No credit pull, no obligation.
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. Fannie Mae Selling Guide B2-1.3-03
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 to Qualify and Apply for a Super Jumbo DSCR Cash-Out Refinance With 90% Rent Coverage · Can You Get Approved for a DSCR Cash-Out Refinance Instead of a Home Equity Investment?
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
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.