The Quick Read: Usually, but low means about 7% to 15% of total project cost rather than zero, and the exact figure depends on how many projects you have completed, what the finished house is worth, and which lender reviews the file, since no true 100% purchase program exists in the network Lendmire places files with. Experience moves you up the leverage tiers. The after-repair value cap can still override them.
- Leverage is tiered by completed projects: 85% of project cost with fewer than two, 90% with two or more, and 93% with five or more.
- Every tier is capped at 75% of after-repair value, so a thin deal can leave you with more cash in than the tier suggests.
- Up to 100% of the rehab budget is released in draws against completed work, so you front the work and get reimbursed.
- Fees, reserves, and interest carry sit on top of the down payment, so the cash you need is larger than the down payment alone.
All figures here vary by lender, property, and experience, and nothing here is a commitment to lend.
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.
What Does a Low Down Payment Actually Mean on a Flip Loan?
It means you fund a small slice of the total project, not a small slice of the purchase price. A flip loan covers two things: the purchase and the rehab. Lenders size the loan against the whole project, so the number that matters is your share of total cost.
That is why “zero down” marketing misleads. A deal can look like 100% financing when the lender funds the rehab and you pay part of the purchase. Or a second loan, or extra collateral, may be filling the gap. Your cash still went in somewhere.
A hard money loan is short-term, asset-based financing from a private lender, and the property is the main collateral. Corporate Finance Institute describes these loans as collateral-driven and short-term. Collateral-driven lending is why lenders want your equity in the deal. A borrower with skin in the game walks away less often.
These loans are for business-purpose, non-owner-occupied investment property. They are reviewed differently from a standard owner-occupied mortgage.
How Much Cash Do You Put Down at Each Experience Tier?
Across the wholesale network, the down payment depends mostly on your documented track record. More completed projects means more leverage. The top tier is reserved for experienced investors.
| Your profile | Leverage on a flip | Your share of cost |
|---|---|---|
| Fewer than 2 completed projects | 85% of project cost | About 15% |
| 2 or more completed projects | 90% of project cost | About 10% |
| 5 or more completed projects | 93% of project cost | About 7% |
| Bridge purchase, no rehab | Up to 80% of purchase price | At least 20% |
| Refinance (cash-out or rate/term) | Up to 65% of value | 35% equity |
Every flip tier is capped at 75% of after-repair value, which the next section explains. Rehab money is a separate line. Up to 100% of the rehab budget funds in draws against completed work. That is a rehab-budget figure, never a purchase leverage figure.
Do not read the 7% as a promise. It describes the best case for a seasoned borrower on a strong deal. First-time investors qualify at the lower leverage tiers, so plan around the 15% baseline.
Many lenders sit near these tiers, but some run tighter. A few cap first-timers well below the top of the range. This is why one lender’s headline number rarely matches another’s.
How Does the Lender Decide How Much You Bring?
The lender runs several tests at once, and the tightest one controls. You never get to pick the test that flatters your deal.
The first test is loan-to-cost: the loan as a share of purchase price plus rehab. The second is the cap on total loan as a share of after-repair value, or ARV. The ARV cap is the real ceiling.
Run the numbers on three modeled deals. These are illustrative assumptions, not market data, and they use percentages only.
Deal one: comfortable margin. Say total project cost equals 80% of ARV. A first-time tier of 85% of cost lands at 68% of ARV, well under the 75% cap. You bring about 15% of project cost.
Deal two: thin margin. Say project cost equals 85% of ARV. The 85% tier lands at about 72% of ARV, just under the cap, so you still bring about 15% of cost. Now say cost rises to 90% of ARV. The same tier would land at about 77% of ARV, above the 75% cap, so the cap controls. The loan is cut to 75% of ARV, which is about 83% of project cost, and you bring about 17% instead of 15%.
Deal three: thin margin, experienced borrower. Take the same cost at 90% of ARV with the 93% tier. That tier alone would land at about 84% of ARV, so the cap cuts it to the same 75% of ARV. Your experience did not help, because the deal itself hit the ceiling.
Here is the takeaway. Your down payment is the gap between total cost and the loan the ARV supports. A bigger discount on the purchase or a smaller rehab budget shrinks that gap faster than any lender negotiation will.
Experience matters in a related way. Brokers in this space see the same pattern repeatedly: borrowers fixate on the tier percentage and skip the ARV test until the appraisal arrives. Run the cap yourself before you make an offer, using conservative value comps. If your own conservative ARV makes the deal thin, assume the cap will bind.
What Else Do You Have to Pay Besides the Down Payment?
Plan on a total cash requirement well above the down payment. A 10% down payment does not mean a 10% check. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
| Cash item | Usually financed? | Notes |
|---|---|---|
| Down payment | No | Your share of project cost |
| Closing costs and lender fees | Varies by lender | Often paid up front |
| Interest carry | No | Interest-only payments made monthly during the term |
| Reserves | No | Verified in your assets |
| Rehab float | Reimbursed in draws | You front the work first |
| Contingency | No | Cushion for overruns |
The rehab float is the line most beginners miss. The rehab budget is approved at closing but released in stages, after inspected work is complete. You pay the contractor first and get reimbursed after the draw. If your cash is thin, a stalled draw can stall the whole job.
Reserves are the other common gate. Lenders want to see funds beyond the down payment, enough to cover interest while the project runs. A strong deal with weak reserves often stalls in review. Bank statements that show the down payment, closing costs, and reserves all in one place make the file easier to read.
Who Qualifies, and Can a Beginner Get In?
A beginner can qualify, but at the lowest leverage tier. The loan is asset-based, so the lender focuses on the property, the plan, and the exit. Your profile still sets the leverage.
Here is what the review typically covers:
- Credit: A 620 minimum score applies, with additional conditions below 660. Higher scores generally make the file easier.
- Experience: Documented completed projects set the tier. Fewer than two puts you at 85% of project cost.
- Deal quality: A discounted purchase, a realistic scope, and a conservative ARV carry real weight.
- Liquidity: Assets for the down payment, fees, and reserves must be verifiable.
- Exit: The lender wants a believable plan to sell or refinance within the term.
These factors trade off. A strong deal with modest experience can beat a mediocre deal with a long track record. Credit matters, but it rarely rescues a thin margin.
Property type matters too. Eligible collateral is non-owner-occupied residential property, one to four units, with ground-up construction allowed up to ten units. Loan amounts run up to $5,000,000, with larger balances handled by exception, and smaller balances vary by lender. Terms run 6 to 18 months, interest-only, with no prepayment penalty. There are no multi-year terms on the current program.
Ways to Bring Less Cash to the Deal
You lower the cash you bring by improving the deal, not by negotiating the lender down. Each lever has a tradeoff.
1. Buy at a bigger discount. A lower cost against the same ARV widens your margin under the cap. The tradeoff is that deeper discounts take more searching.
2. Trim the scope. A tighter rehab budget reduces your float and your cost base. The tradeoff is that cutting corners can drag down the final value.
3. Build a track record. Completing projects moves you from 85% toward 90% and 93% of project cost. The tradeoff is time, and the first deal still happens at the baseline.
4. Add a partner. A partner can supply the down payment in exchange for a share of profit. The tradeoff is that you give up upside, and lenders will want to see how the partnership is structured.
5. Negotiate seller terms. Seller financing can fill part of a gap without a lender. The tradeoff is that a second lien or outside debt can conflict with the primary lender’s terms, so disclose it early.
6. Pledge other property. Some structures use another owned property as additional collateral to reduce the cash at closing. Availability varies by lender, and it puts a second asset at risk.
7. Start smaller. A modest first flip builds the record that unlocks the next tier. The tradeoff is smaller profit on the first deal.
Be careful with borrowed down payments. A personal loan used to fund your down payment is a stacked debt, and it usually costs more because it carries no collateral. Lenders may ask where the down payment came from, and layered debt can break the loan terms. If a program advertises zero down, ask whether it is really two loans.
What About FHA 203(k) and Other Renovation Loans?
Owner-occupant renovation loans are a different product. The FHA 203(k) program funds a purchase and repairs in one mortgage for a borrower who will live in the home.
The draw concept looks similar, but the borrower, the purpose, and the rules are different. A flip loan is business-purpose financing for investment property. Do not use 203(k) assumptions to size a hard money deal.
When Low Down Is a Bad Idea
Leverage magnifies mistakes along with profit. The less cash you leave in a deal, the less room you have when something slips.
Three scenarios deserve a hard look before you commit:
- Overrun: The rehab costs more than the budget. Draws cover the approved scope, so the extra comes out of your pocket.
- Delay: The sale takes longer than the term assumed. Interest-only payments keep running, and you may need to refinance or extend.
- Low value: The appraisal comes in under your ARV. The cap resets the loan, and your cash requirement jumps.
Fees compound all three. Origination and lender charges add to your cost basis, and every extra month adds interest carry. A deal that needs perfect execution to profit is too thin for high leverage. Stress the deal with a lower sale price and a longer hold, and keep going only if the margin survives.
Tax treatment varies; consult a qualified professional before relying on any deduction.
How to Prepare Before You Apply
A clean package makes it easier for a lender to say yes at the right leverage. Assemble these before you approach anyone:
1. A contract or deal summary with purchase price and property details.
2. A line-by-line scope and budget from a contractor you trust.
3. Value support, meaning comps for both as-is and after-repair value.
4. Asset statements showing the down payment, closing costs, and reserves.
5. Your experience record, listing completed projects with addresses and outcomes.
6. An exit plan, whether sale or refinance, with a realistic timeline.
7. Entity documents, if you buy through an LLC, subject to lender program eligibility.
Questions to Ask a Lender
- Which leverage tier does my track record place me in?
- Is the loan sized on cost, on ARV, or both, and which test is tighter on this deal?
- How are draws requested, inspected, and funded?
- Which fees are due at closing, and which are charged at each draw?
- What are the extension terms if the sale runs past the term?
- Is a second lien, partner capital, or seller financing acceptable?
Key Terms Defined
After-repair value (ARV): The estimated value of the property once renovations are finished.
Loan-to-cost (LTC): The loan amount as a share of purchase price plus rehab budget.
Draw schedule: The staged release of rehab funds after inspected work is complete.
Holdback: Rehab money set aside at closing and released through draws rather than paid up front.
Reserves: Verified liquid funds you keep beyond the down payment to cover interest and surprises.
Interest-only: A payment structure where you pay interest during the term and repay principal at payoff.
Frequently Asked Questions
Can closing costs be rolled into a flip loan?
It varies by lender. Plan to pay closing costs and lender fees out of pocket, and treat any amount a lender folds in as a bonus. Because the cost-based tiers already count your share of project cost, rolling fees into the loan usually does not reduce your total cash need as much as it appears to.
Can I get a flip loan with a 620 credit score?
A 620 minimum score applies, with additional conditions below 660. Expect the lower leverage tier, a fuller review of reserves and the deal, and less room for a thin margin. Lenders vary on how much weight they give credit versus the property and your experience. Every figure here varies by lender and program, and guidelines, property type, leverage, and credit profile all apply.
What property types qualify?
Non-owner-occupied residential property of one to four units qualifies, and ground-up construction can run up to ten units. Owner-occupied homes, commercial, land, and similar collateral are not part of this program. An owner-occupied renovation loan is a different product.
What if the flip does not sell before the term ends?
Terms run 6 to 18 months, and the loan is interest-only with no prepayment penalty, so you can sell or refinance at any point. Many investors refinance out of hard money into long-term rental financing once the property is stabilized, a path Lendmire brokers. The complete DSCR loans guide explains how rental coverage works. Qualification is subject to lender guidelines, and the new loan must pay off the bridge balance.
Does hard money ever fund 100% of a flip?
No true 100% purchase program exists in this network. Up to 100% of the rehab budget funds in draws against completed work, which can make a deal look fully financed. Any program advertising zero down is usually a second loan or extra collateral, so ask what sits behind the claim.
Next Steps
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. Cash-light flips tend to succeed when the buyer sizes the cash gap before making an offer, not after the appraisal.
If a partner or outside lender is filling your cash gap, read Lendmire’s piece Hard Money vs. Private Money for a Flip With a Small Down Payment.
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, which can make them 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: Hard Money Flip Loan vs Private Money for a First-Time Investor · Hard Money Bridge Down Payment Documents for a Single-Family Home · How a Hard Money Lender Sets the Down Payment on a Condo Bridge Loan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.