The Quick Read: Yes, a small down payment is realistic on a fix-and-flip hard money loan, but true zero down is rare and there is no 100% purchase program. In Lendmire’s wholesale network, flip leverage is sized on loan-to-cost and capped against after-repair value, so the cash you bring is the gap between those two limits.
- Leverage runs 85% of project cost with fewer than 2 completed projects, 90% at 2+, and 93% at 5+, and it varies by lender, property, and experience.
- Every tier is capped at 75% of after-repair value, and the lower of the two caps controls.
- Up to 100% of the rehab budget funds in draws against completed work, not at closing.
- Closing costs, interest carry, and reserves still come out of your pocket.
- Credit starts around a 620 minimum, with added conditions below 660.
What “Little Down” Actually Means
Little down means the lender covers most of the project cost and you cover the rest. The rest is small when the deal is bought well below its repaired value.
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.
Three terms get mixed up here. Cash down is the gap between your total project cost and the loan. Cash to close is that gap plus fees, points, and prepaid items. Cash needed is cash to close plus reserves and money to float early rehab work. A deal can have a tiny down payment and still need real cash overall.
Underwriting leans on the property, the plan, and the exit. It does not ignore the borrower. Credit, liquidity, entity documents, and track record all still get reviewed. A hard money loan is, in plain terms, a short-term loan secured by the property and made by a private or non-bank lender, as Corporate Finance Institute describes it.
How Much Does a Lender Let You Borrow?
Across the wholesale network, flip loans are sized on loan-to-cost, tiered by how many projects you have completed. Those tiers sit at 85%, 90%, and 93% of project cost, each subject to lender guidelines. The top tier is reserved for experienced investors. First-time investors qualify at the lowest tier.
Then a second test applies. The loan cannot exceed 75% of after-repair value. Whichever limit is lower controls, and your cash is the difference between that loan and total cost.
Here is why zero down happens at all. If purchase price plus rehab comes in well under 75% of the repaired value, the cost-based loan is the smaller number, and the leverage tier decides the rest. If cost runs close to the ARV cap, the ARV cap bites and the gap grows. Zero down is not a shelf product you shop for. It is what a deep-discount deal looks like on paper, and even then the cost tiers above stop short of 100% on the purchase.
One more number. Bridge purchases with no rehab reach up to 80% of purchase price. Cash-out and rate-and-term refinances reach up to 65% of value. Those are different transactions with different ceilings.
How Does the Down Payment Work in Practice?
The down payment is whatever total project cost minus the loan leaves behind. Take a modeled flip where the lender sizes the loan at 90% of project cost. You carry the other 10%, plus fees. The ARV cap then checks whether that loan fits under 75% of repaired value. If it does not, the loan shrinks and your cash goes up.
Run the same deal at three experience levels. With fewer than 2 completed projects, the 85% tier leaves you the largest gap. At 2+ projects, the gap narrows. At 5+, it is the smallest the network offers on cost. The deal did not change. Your track record did.
That is the middle ground most borrowers miss. Moving from the lowest tier to the next one is worth a lot, and it costs nothing but completed projects.
What You Still Pay in Cash
Even a thin down payment leaves a stack of other cash needs:
- Closing costs and lender fees.
- Interest carry. Interest is typically charged on funds actually disbursed.
- Reserves, which vary by lender and file.
- Inspection and draw costs.
- The early rehab float.
That last item catches people. The rehab budget is held back at closing and released in draws after completed work is inspected. Up to 100% of the rehab budget can fund this way. But a contractor who wants money to start has to be paid before the first draw reimburses you. Experienced borrowers sometimes negotiate advances. First-timers usually do not.
Lendmire’s piece on how draw schedules release rehab money walks through the holdback and reimbursement sequence in more detail.
Who Gets the Lowest Down Payments?
Experience drives it most. The 93% tier needs 5+ completed projects. The 85% tier is where first-time investors land. Credit sits behind that: a 620 minimum, with added conditions below 660. Stronger credit and documented liquidity make a file easier to place, though none of it is a commitment to lend.
Deal quality counts as much as the borrower. Light-to-medium rehabs fit high leverage better than long, heavy ones. A lender wants a documented scope of work, a contractor quote, a comp pack supporting the repaired value, and a clean exit. A scope with a built-in contingency reads better than one that assumes nothing goes wrong.
Experience affects terms more than eligibility, but it affects terms a lot.
Ways to Reduce the Cash You Bring
| Structure | What it does | What you risk |
|---|---|---|
| Buy deeper below ARV | Shrinks the gap on its own | Fewer deals qualify |
| Build track record | Moves you to a higher cost tier | Takes completed projects |
| Cross-collateral | Pledges another owned property | Puts that property at risk |
| Gap funding | A second provider covers part of the gap | Added cost and a second lender |
| Partner capital | A JV partner funds the cash | Shared profit |
Stacked second liens and seller financing are not automatic. Many first-position lenders want to be the only lien, so any gap structure needs the first lender’s sign-off before you commit to it.
Risks of Putting Little Down
Thin equity leaves a thin cushion. If the repaired value comes in low, the ARV cap shrinks the loan and you cover the shortfall. If the rehab overruns, the overrun is yours. If the sale slips, interest keeps accruing against a loan that has a maturity date.
Terms run 6-18 months, interest-only, with no prepayment penalty. There are no multi-year options on this program. Long rehabs and slow sales are the stress cases, so size the project to the term.
Exit planning matters as much as entry. Many investors refinance out of hard money into long-term DSCR financing once the property is stabilized, and Lendmire brokers that path. The mistake to avoid is a bridge note that matures before the DSCR lender’s ownership clock runs out. The DSCR lender reads invoices, proof of payment, the appraisal, and ownership history, not the draw schedule. The complete DSCR loans guide covers what that exit file looks like.
If you plan to sell instead, taxes enter the picture. Tax treatment varies; consult a qualified professional.
What If You Do Not Qualify Yet?
Work the decision in order. First, shrink the project: a lighter rehab and a cleaner scope lowers cash needed. Second, find a better discount at purchase, since that moves the ARV test in your favor. Third, bring in a partner or a gap provider. Fourth, build completed projects at a smaller scope to reach the next cost tier.
Waiting is a legitimate answer. A flip that needs every dollar of leverage to pencil is a thin deal, and the lender’s caps are doing you a favor by exposing it.
Application-Ready Checklist
- Executed purchase contract.
- Comp pack supporting after-repair value.
- Line-item scope of work with a contractor quote.
- Entity documents, if buying through an LLC (subject to lender program eligibility).
- Bank statements showing liquidity.
- A written exit plan, sale or refinance.
Property type matters too. The program covers non-owner-occupied residential, 1-4 units, with ground-up construction to 10 units. Commercial, land, and owner-occupied properties are not offered. Hard money is not available in LA, MN, ND, SD, or in Baltimore, Chicago, or Detroit.
Questions to Ask Any Lender
1. Is the loan sized on cost, on ARV, or both, and which cap controls on my deal?
2. How do my completed projects change the tier?
3. When does rehab money release, and what do I front before the first draw?
4. How is interest charged on held-back funds?
5. What does the first-lien lender require if I add gap funding?
Key Terms Defined
ARV: After-repair value, the estimated worth of the property once the work is done.
Loan-to-cost: The loan as a share of purchase price plus rehab budget.
Holdback: Rehab money the lender keeps back at closing and pays out in draws.
Gap funding: A second capital provider that covers part of the cash gap left after the first-lien loan, usually with its own cost and requirements.
Cross-collateral: Pledging another property as added security for the loan.
Frequently Asked Questions
Is zero down possible on a fix-and-flip hard money loan?
Rarely. The network’s cost tiers stop below 100% on the purchase, and the 75% ARV cap can shrink the loan further. A deep discount to repaired value, strong experience, or extra collateral can bring the cash down close to nothing, but fees and reserves remain.
Can closing costs be rolled into the loan?
Treat them as cash you bring unless the lender confirms otherwise. Closing costs, points, and interest carry sit outside the leverage tiers, and a lender can limit how much is financed.
What credit score do I need?
A 620 minimum is the floor, with added conditions below 660. First-time investors qualify at the lower leverage tiers. Credit is one factor alongside the property, the plan, and the exit.
Does the lender fund the rehab at closing?
No. Up to 100% of the rehab budget funds in draws against completed work. The purchase portion funds at closing and the rest is held back, so you usually front early contractor costs.
Can I use this for a first flip?
Yes, at lower leverage tiers. Expect to bring more cash than an experienced investor. Exact terms vary by lender, property, and experience, and nothing here is a commitment to lend.
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.
About Lendmire
Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 41 markets, including Washington, D.C., through wholesale and investor-lending channels. DSCR loans are evaluated by the lender on rental income rather than personal income, subject to lender guidelines — a fit for LLC-owned portfolios, self-employed investors, and operators scaling beyond conventional loan caps. Recognized as a Scotsman Guide Top Mortgage Workplace in 2025 and 2026.
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References
1. Corporate Finance Institute: Hard Money Loan
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Is a Small Balance Hard Money Loan Worth It for a Fix and Flip? · Hard Money Loan to Cost Limits for a Fix and Flip · Can You Get a Non-Recourse Hard Money Fix-and-Flip Loan?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.