The Quick Read: Your cash at closing is the gap between what the project costs and what the lender will fund, and across the wholesale network that gap typically runs about 7% to 15% of project cost on rehab deals and at least 20% of price on a bridge purchase with no rehab, before fees and reserves. Every figure varies by lender, property, and experience.
- Rehab deals are sized on loan-to-cost, tiered by completed projects, and always capped at 75% of after-repair value.
- A bridge purchase with no rehab typically funds up to 80% of the purchase price.
- Cash-out and rate/term refinances typically top out around 65% of value.
- There is no true 100% purchase program. Up to 100% of the rehab budget can fund, but only in draws.
- The down payment is not your total cash need. Points, fees, interest carry, and draw float come on top.
Key Terms Defined
Loan-to-cost (LTC) is the loan as a share of what the project costs: purchase price plus rehab budget.
After-repair value (ARV) is what the property should be worth once the work is finished.
Draw is a release of rehab money after the lender confirms a stage of work is done.
Cross-collateral means pledging a second asset, such as another property, to reduce the cash you bring.
Bridge loan versus hard money loan. In practice the terms overlap, and this article treats them as one investor product.
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 Is a Hard Money Bridge Loan Down Payment?
It is the part of the project you pay for yourself. The lender funds a share, and you cover the rest.
This is an asset-based loan. A market source’s hard money loan definition describes lending that rests on the property’s value, not the borrower’s income. A bridge loan is short-term, backed by collateral, and costly, which is why lenders want you to have real money in the deal.
One clarification. Many consumer guides use “bridge loan” for a homeowner borrowing against a current residence while buying the next one. That is a different product. Everything here is the investor version: non-owner-occupied residential property, 1-4 units, with ground-up construction reaching 10 units.
How Underwriting Treats Your Down Payment, Step by Step
Think of it as two tests, and the lower answer wins.
1. You submit the deal. That means the purchase price, scope of work, rehab budget, and comparable sales supporting ARV. The lender is underwriting the property, the plan, and the exit.
2. The lender sets the cost test. On fix-and-flip files, the network’s leverage is tiered by documented completed projects: 93% of project cost at 5+ projects, 90% at 2+, and 85% with fewer than 2.
3. The lender sets the value test. Whatever the cost test says, the loan cannot exceed 75% of ARV.
4. The loan is the lesser of the two. The difference between that loan and your total cost is your equity in the deal.
5. You fund closing. Your cash is the purchase price minus the advance, plus points and fees.
6. Rehab money flows in draws. Up to 100% of the rehab budget can fund, but it is released against completed work. You usually front the early work and get reimbursed.
7. The lender checks credit and liquidity. A 620 minimum score is typical, with extra conditions below 660. First-time investors can qualify at the lower leverage tiers, and the top tier is reserved for experienced investors.
That is the part most people get wrong. They hunt for one fixed percentage. There is no such number, only a cost cap, a value cap, and your track record.
The Structures: What You Put Down by Deal Type
The right structure depends on what you are buying and what you plan to do with it. This table shows typical network ranges. Each varies by lender, property, and experience.
| Deal type | What the lender sizes against | Typical funding |
|---|---|---|
| Bridge purchase, no rehab | Purchase price | Up to 80% of price |
| Fix-and-flip, 5+ projects | Project cost, ARV cap | 93% of cost, max 75% of ARV |
| Fix-and-flip, 2+ projects | Project cost, ARV cap | 90% of cost, max 75% of ARV |
| Fix-and-flip, under 2 projects | Project cost, ARV cap | 85% of cost, max 75% of ARV |
| Ground-up, 3+ projects | Cost and completed value | 90% of cost, max 75% of value |
| Cash-out or rate/term refinance | Current value | Up to 65% of value |
Two details matter. The cost percentages are loan-to-cost, never a loan-to-value ceiling, so do not read 93% as a 93% LTV. And the rehab line is a budget figure that funds in draws, not a purchase LTV. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Loan amounts run up to $5,000,000, with larger sizes by exception. Terms are typically 6-18 months, interest-only, with no prepayment penalty.
Worked Example: When the Value Cap Binds
Run the numbers in index units, with ARV set to 100. These are modeled assumptions, not market data.
Deal one. The purchase is 60 and the rehab is 20, so total cost is 80. An investor with one completed project sits in the 85% tier. That is 68 on cost, well under the 75 value cap. The cost test controls. The investor funds the other 12, which is 15% of project cost.
Deal two. The purchase is 70 and the rehab is 25, so total cost is 95. Even the 90% tier would allow 85.5. But the value cap holds the loan to 75. The investor funds the other 20, about 21% of project cost.
Look at what happened in deal two. The experience tier barely mattered, because the 75% of ARV cap controlled. A tight margin between cost and finished value raises your cash in, no matter how many flips you have done.
Margin drives the down payment more than the headline percentage does.
Total Cash to Close Is Bigger Than the Down Payment
Plan for the whole stack, not just the equity line.
- Equity: the gap between cost and the loan.
- Points and closing fees: priced by the lender and varying by deal.
- Interest carry: the loan is interest-only, so you pay every month of the term.
- Draw float: you often fund early work before reimbursement.
- Reserves: cash left over after closing, which lenders and sensible investors both want to see.
- Insurance and title: a builder’s risk policy is typical before a rehab closing.
Corporate Finance Institute’s bridge financing overview notes that bridge money is temporary and expensive. That cost is one reason liquidity matters as much as the down payment.
Where the General Rule Breaks
A fully financed purchase. The network has no true 100% purchase program. Fully funded rehab budgets exist, but the purchase side needs your equity. If a pitch sounds like 100% of everything, read the structure closely. It usually involves extra collateral, not free money.
Appraisal or ARV shortfall. If the lender’s value comes in below your projection, the 75% cap shrinks the loan and your cash due at closing grows. Build in a cushion.
Refinance bridges. On a cash-out or rate/term refinance, the cap is about 65% of value. There is no purchase price to anchor to, so your “down payment” is the equity you already hold.
First-time investors. They qualify at the lower leverage tiers, which means more cash in. Experience buys leverage, and only up to the ARV cap.
Property types. Hard money in this network covers non-owner-occupied residential, 1-4 units. Commercial, industrial, land or lots, hospitality, and owner-occupied property are not offered, so no down payment formula applies to them.
Entity buyers. If an LLC is buying, the borrower entity and the source of cash both get reviewed, subject to lender guidelines.
Credit near the floor. A score between 620 and 660 can work, but additional conditions apply, and they often show up as lower leverage or more cash in.
Hard money loans are business-purpose investor loans, so they are reviewed differently from a standard owner-occupied mortgage. The CFPB’s Regulation Z scope rule exempts business-purpose credit from consumer mortgage requirements.
Practitioner Note on Cash Sourcing
Across the wholesale network, lenders want to see cash to close sitting in your account, documented by bank statements. Some want funds seasoned, meaning parked for a set period, and others do not. Ask before you commit to a deal, not after. Money that appears suddenly from an unclear source slows files and invites questions.
The Decision in Practice
Ask four questions before you sign a contract.
1. Which test controls? Run cost and ARV math both ways. Use a conservative ARV, because the lender will.
2. Do you have the whole stack? Add equity, fees, carry, draw float, and reserves. If the total strains you, the deal is too big.
3. Where is your tier? Count documented completed projects honestly. Fewer than two puts you at the 85% cost tier.
4. What is the exit? The loan is 6-18 months with no multi-year option. Many investors refinance out of hard money into long-term DSCR financing once the property is stabilized, and Lendmire brokers that path. Check that the rent, seasoning, and appraisal will support that refinance before you close the bridge. If they fall short, you leave more cash in the deal. Lendmire’s complete DSCR loans guide walks through that next step.
A bridge fits when a deal has real margin, you have the cash stack, and the exit is clear. Skip it when the numbers only work at the highest leverage tier.
Frequently Asked Questions
Can I get a hard money bridge loan with no money down?
Not on the purchase. Rehab money can fund up to 100% of the budget, but in draws after work is done, so you still bring equity and early working cash. Everything varies by lender, property, and experience.
Is the down payment based on price or appraised value?
Both matter. The lender runs a cost test and a value test, and the lower loan controls. On rehab deals the value test is 75% of after-repair value. On a refinance it is about 65% of current value.
Do first-time investors need more cash?
Yes, typically. With fewer than two completed projects, loans size at about 85% of project cost, versus 90% at 2+ and 93% at 5+. A 620 credit score is the minimum, with extra conditions below 660.
Does a rehab budget change my down payment?
Yes, it can. A larger budget raises total cost, and if cost plus purchase pushes past the 75% of ARV cap, your required cash rises. Rehab funds release in draws, so you also need float.
Can I use equity in another property?
Sometimes, through cross-collateral, where another asset is pledged to reduce cash in. Whether it works depends on the lender, the asset, and the structure, and it is never automatic.
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. As a broker, Lendmire arranges financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. Nothing here is a commitment to lend, and every file is underwritten individually.
About Lendmire
A DSCR-focused mortgage broker, Lendmire (NMLS# 2371349) places investor financing across 41 markets — 40 states plus Washington, D.C. — with DSCR eligibility generally reviewed by the lender on property cash flow instead of tax returns, subject to lender guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in 2025 and 2026.
Hard money often opens the deal, and a refinance typically closes the chapter – see the hard money loan overview.
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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. Corporate Finance Institute: Bridge 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: Can a First-Time House Flipper Get a Hard Money Loan? · Can a Self-Employed Borrower Qualify for a Hard Money Bridge Loan? · Can You Buy a Flip in an LLC With a Hard Money Loan?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.