The Quick Read: Your down payment on a hard money bridge loan is the gap between the price (or project cost) and what the lender will advance, and out-of-state investors face the same leverage tiers as local ones, though lender coverage and market risk can shift what you are offered.
- A bridge purchase without rehab typically goes up to 80% of the purchase price, so the cash you bring starts near 20%.
- Fix-and-flip loans are sized on project cost by experience tier (85%, 90% or 93% of cost), and every tier is capped at 75% of after-repair value.
- Cash-out and rate/term refinances typically go up to 65% of value.
- There is no true 100% purchase program. Up to 100% of the rehab budget can fund in draws as work is completed.
- Every figure varies by lender, property, and experience, and nothing here is a commitment to lend.
What a Hard Money Bridge Loan Actually Is
A hard money loan is a short-term loan from a private, non-bank lender, secured by the property. That matches what you see across a wholesale lending network: the lender cares most about the property, the plan, and the exit.
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.
“Bridge” describes the purpose. The loan carries you from where you are now to longer-term financing. For a rental investor, that usually means buying a property that a bank will not touch yet, then refinancing it once it is stable. Hard money names the source of the funds. Bridge names the job. A bridge loan can come from a hard money lender.
One caution on vocabulary. Plenty of articles use “bridge loan” to mean a homeowner borrowing against a current house to fund the next one. This article covers the investor version, which is business-purpose lending on non-owner-occupied property.
Terms are short. Across the programs Lendmire places files with, terms run 6 to 18 months, interest-only, with no prepayment penalty. Loan amounts go up to $5,000,000, with larger loans handled by exception.
How Underwriting Turns Leverage Into Your Down Payment
The down payment is not a fee. It is what is left after the lender applies its leverage cap. Here is the sequence.
1. The lender picks a value basis. On a purchase-only bridge, that is usually the purchase price or as-is value. On a rehab deal, it is project cost and after-repair value (ARV), meaning the value once the work is finished.
2. The lender applies its caps. The lowest cap controls. If a cost-based cap and an ARV-based cap disagree, the stricter result sets the loan.
3. You fund the difference at closing. That difference is your down payment.
4. Your profile adjusts the tier. Documented completed projects, credit score, and exit plan move you up or down. First-time investors qualify at the lower leverage tiers.
5. The lender checks where your cash came from. Expect bank statements, and expect the lender to want your own seasoned funds.
6. You pay closing costs and lender fees on top. They are not part of the down payment, and they are not financed in the leverage figure.
7. You line up the exit. The loan is repaid by a sale or a refinance.
The math is the loan-to-value idea in a different outfit. Hard money lenders simply set the ceiling lower than a bank would, and some measure it against cost instead of value.
Key Terms Defined
LTV (loan to value): the loan amount divided by the property’s value. A lower LTV means a bigger down payment.
Loan-to-cost (LTC): the loan divided by the total project cost, meaning purchase price plus rehab budget.
ARV (after-repair value): what the property should be worth when renovations are finished. Flip lenders cap the loan against it.
Draws: rehab money released in stages against completed work, not handed over at closing.
Cross-collateral: pledging a second property you own as additional security, in place of some cash.
Seasoned funds: money that has sat in your account long enough to show it is yours and not borrowed for the deal.
PITIA: principal, interest, taxes, insurance, and association dues. This is the monthly obligation a long-term rental loan measures rent against.
The Leverage Tiers, Side by Side
The table below shows the leverage ranges seen across the network for business-purpose, non-owner-occupied 1-4 unit property. They are typical ceilings, and each varies by lender, property, and experience.
| Deal type | Typical leverage ceiling | Cash you bring |
|---|---|---|
| Bridge purchase, no rehab | Up to 80% of purchase price | About 20% at the top tier |
| Flip, 5+ completed projects | Up to 93% of project cost | About 7% of cost |
| Flip, 2+ completed projects | Up to 90% of project cost | About 10% of cost |
| Flip, fewer than 2 projects | Up to 85% of project cost | About 15% of cost |
| Cash-out or rate/term refinance | Up to 65% of value | About 35% equity |
Two cautions on reading it. First, the cost-based tiers always carry a second cap: 75% of after-repair value. If your purchase and rehab eat most of the ARV, the ARV cap binds and your cash requirement rises above the table. Second, the 100% figure you may have seen applies only to the rehab budget, funded in draws against completed work. It is not a purchase LTV.
The top flip tier is reserved for experienced investors.
What Moves Your Requirement Up or Down
Experience is the biggest lever. Moving from fewer than 2 documented projects to 2 or more shifts you from 85% to 90% of project cost. Reaching 5 projects shifts you to 93%. That is a real change in the cash you wire.
Credit matters, but less than in bank lending. Underwriting is asset-based, so the property, plan, and exit lead. The network generally wants a 620 minimum score, with additional conditions below 660.
Deal quality also counts. A tight margin between cost and ARV pushes the ARV cap into play. A clear scope of work with realistic numbers helps the lender trust the plan.
Location of the property matters too, and this is where out-of-state investors feel it.
Out-of-State: What Changes and What Doesn’t
Here is the plain answer. Nothing sets a higher down payment by rule for an out-of-state investor. The leverage tiers attach to the deal and the borrower’s track record, not the borrower’s home address.
The effect is indirect, and it comes through three channels.
Lender coverage. Hard money lenders are licensed or active in some states and not others. In the network Lendmire works with, programs cover 41 markets, including Washington, D.C. A few states and cities are excluded, so confirm the property’s location is served before you spend money on an appraisal or contract.
Local-market depth. In a thin market with few comparable sales, a lender has more trouble judging value and resale. That risk can show up as a lower offered leverage or a higher cash requirement. The same flip in a deep market may see a better tier.
Your ability to oversee the work. A remote investor cannot walk the site. Lenders see that as execution risk, which is another reason experience and a credible contractor plan carry weight. If you hold the property in an LLC, expect entity documents to be requested, subject to lender program eligibility.
Practically, plan for travel costs as part of your cash. Budget for site visits and closings the way you budget for the down payment and reserves. A local agent, a reliable title company, and an insured contractor with a detailed draw schedule matter more when you are not on site.
What Cash to Close Really Includes
The down payment is the headline, but it is not the whole check. A realistic cash-to-close stack looks like this.
| Cash item | Part of leverage math? |
|---|---|
| Down payment (price or cost minus loan) | Yes |
| Closing costs and lender fees | No, paid on top |
| Insurance and title charges | No, paid on top |
| Rehab money before draws release | Often fronted by you |
| Interest carry during the hold | No, budget separately |
Walk through it in percentages. Say you buy a property at an agreed price on a bridge purchase with no rehab, and the lender advances 80% of that price. You bring the other 20%, plus closing costs, plus insurance. If your lender sets a reserve requirement, you also show cash left over after closing. Reserves vary by lender, loan size, and transaction type.
Rehab deals add another layer. Draws reimburse completed work, so you often pay a contractor first and get reimbursed after an inspection. That timing gap is cash you need on hand, even though the budget is financed.
Where the Down Payment Can Come From
The cleanest source is your own cash, sitting in an account with a statement history. Proceeds from selling another property also work, because the closing statement documents them. Lenders look hard at borrowed down payments, because the whole point of the down payment is skin in the game.
Verified, seasoned funds are not unique to hard money. Conventional lending has the same instinct: Fannie Mae’s depository account guidance requires down payment funds to be verified, and a mortgage-pool disclosure filed with the SEC describes a 60-day sourcing and seasoning check. Hard money lenders set their own documentation standards, so treat those as a benchmark for the habit, not as the rule on your file.
Some lenders accept cross-collateral instead of part of the cash. You pledge equity in a property you already own, and the lender takes a lien on it as additional security. This can reduce cash out of pocket, but it raises your risk: if the new deal goes wrong, you can lose two properties instead of one. Weigh that before you agree.
Funds that appear suddenly before closing usually draw questions. Move money early, keep statements, and be ready to explain every large deposit.
The Zero-Down Claim, Taken Apart
You will see offers that say “100% financing,” but the figure rarely means 100% loan-to-value. Where it applies at all, it usually refers to the rehab budget, which can be funded in full through draws. The purchase portion is sized as a share of project cost, so on a flip the tiers run 85%, 90% or 93% of cost, always capped at 75% of after-repair value.
A true no-money-down purchase is not part of the programs Lendmire places. There is no 100% purchase program. What exists is a high-leverage flip tier for experienced investors, where the loan is sized against cost and capped at 75% of ARV, and a rehab budget that can fund fully through draws.
A headline like 90% of cost plus 100% of the rehab can be accurate, and it still leaves you with a down payment, closing costs, and carry. Always ask what the percentage applies to: price, total cost, or value. Then compare full term sheets, not headline numbers.
Where Down Payment Meets the Exit
The bridge ends with a sale or a refinance. Many investors refinance out of hard money into long-term rental financing once the property is stabilized, and Lendmire brokers that path. A DSCR loan, covered in the complete DSCR loans guide, compares the property’s rent to its monthly obligation, so qualification rests primarily on property-level rental income covering the payment, subject to lender guidelines.
Your bridge down payment shapes that exit in one specific way. The refinance has to pay off the bridge balance plus costs, and the new loan is capped by its own leverage limits on the appraised value. If the property appraises short of plan, the gap is cash you bring to the refinance. A larger down payment on the bridge reduces that risk.
A pass on the coverage test does not mean positive cash flow. Repairs, vacancy, management, and capital expenses sit outside the calculation.
When the General Rule Breaks
A few named edge cases change the picture.
Cross-collateral deals. Pledging another property can shrink your cash, as described above, at the price of more exposure.
Thin or small markets. A lender who struggles to value a property may drop leverage or turn the deal down, so your requirement can rise even with a strong record.
First-time investors. Without documented completed projects, you sit at the 85% of project cost tier at most, and the lender may want a stronger scope, a stronger contractor, or both.
Ineligible property types. Commercial, industrial, land or lots, hospitality, and owner-occupied property are not offered. Ground-up construction is an exception, available up to 10 units.
Refinances. A refinance caps near 65% of value, so “down payment” really means equity. You need a lot more of it than on a purchase.
What the Decision Looks Like in Practice
Start from the property, not the percentage. Confirm the lender covers the state. Get the purchase price or cost, a rehab budget, and a conservative ARV on paper. Then work out your tier from your project count, and apply the ARV cap to see which cap binds.
Next, add closing costs, a draw-timing cushion, carry through the hold, and any reserves. That total is your real cash requirement, and it is usually larger than the down payment alone.
Finally, test the exit. Ask whether the stabilized property would support the refinance you need. If it only works when everything goes right, add cash or lower the leverage.
Frequently Asked Questions
Do out-of-state investors need a bigger down payment on a hard money bridge loan?
Not by rule. Leverage tiers follow the deal and your track record, not your address. The indirect effects are lender coverage in the property’s state, how well the lender can judge value in a thin market, and how credible your remote oversight plan is. Each can shift the offer. Terms vary by lender, property, and experience.
Can I get a hard money bridge loan with no money down?
No true 100% purchase program exists. The closest structure is the top flip tier for experienced investors, up to 93% of project cost and capped at 75% of ARV, plus up to 100% of the rehab budget funded in draws. You still bring a down payment, closing costs, and carry.
Does the down payment apply to price or to value?
It depends on the deal type. A bridge purchase without rehab is sized as a percentage of purchase price, typically up to 80%. Flip loans are sized on project cost with a 75% ARV cap. Refinances are sized on value, typically up to 65%.
Can I use another property instead of cash?
Some lenders allow cross-collateral, where you pledge equity in a property you own in place of part of the cash. It can cut your out-of-pocket cost, but it puts a second property at risk if the deal fails.
What happens to my down payment if the exit slips?
It is the first money exposed. The loan is interest-only with a short term, so a delayed sale or refinance means extending, paying more carry, or refinancing under pressure. A larger down payment gives you more room.
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. Reach the team at 828-256-2183 or request a quote.
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
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. Fannie Mae depository accounts guidance (homebuyer.com)
2. SEC filing on down payment sourcing and seasoning
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Refinance Out of Hard Money After an Overspent Rehab? · Bank Statement Requirements for a Portfolio Owner Leaving Hard Money · Hard Money Fix-and-Flip Qualification Requirements for Investors
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- 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.