The Quick Read: A hard money bridge loan on a purchase is sized by the property’s value and the project’s cost, not by your income. Underwriting then checks your paperwork against four questions: who you are, what you own, how much cash you hold, and how you will repay. Every figure below varies by lender, property, and experience, and nothing here is a commitment to lend.
- The loan is the lowest result of several tests: purchase price, as-is value, total project cost, and after-repair value.
- Across the network Lendmire works with, a bridge purchase with no rehab typically reaches up to 80% of purchase price.
- Rehab deals are sized on project cost and capped by after-repair value, so your experience tier matters.
- Your documents prove identity, ownership, value, liquidity, plan, and exit.
- Most files stall on thin proof of funds, mismatched entity names, or a vague exit.
What Is a Hard Money Bridge Purchase Loan?
It is short-term, asset-based financing that closes the gap between buying a property and landing permanent financing. The property is the collateral. The lender mainly asks whether the collateral covers the loan and whether you have a believable way to pay it off.
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.
“Hard money” and “bridge” are often used as one phrase, but they name different things. Hard money describes the kind of lender. Bridge describes the job the loan does. On an investor purchase, the two overlap almost completely.
Do not confuse this with the consumer bridge loan. That product lets a homeowner buy before selling and is sized on the combined value of two homes. An investor buying a rental has no home to sell, so the underwriting is a different exercise.
Typical program shape across the lenders Lendmire places files with:
- Loan size: up to $5,000,000, larger by exception. Smaller balances vary by lender.
- Term: 6 to 18 months, interest-only, with no prepayment penalty on the current program.
- Property: non-owner-occupied residential, 1 to 4 units. Ground-up construction runs to 10 units.
- Credit: a 620 minimum score, with added conditions below 660. First-time investors qualify at the lower leverage tiers.
Underwriting stays asset-based, which means the property, the plan, and the exit carry the file. That does not mean the lender ignores you. Credit history, experience, and cash on hand still get checked.
How Do Lenders Set the Loan Limit on a Purchase?
The limit is a stack of caps, and the lowest one controls. A lender runs your deal through each test and funds the smaller number. Knowing which cap binds on your deal tells you how much cash to bring.
| Test | Measured against | When it applies |
|---|---|---|
| Purchase-price LTV | Contract price | Bridge purchase, no rehab |
| As-is value | Appraised current value | Low appraisal cuts the loan |
| Loan-to-cost | Price plus rehab budget | Fix-and-flip purchases |
| After-repair value (ARV) | Projected finished value | Caps every rehab tier |
Here is what each means in plain words. LTV, or loan-to-value, is the loan divided by the property’s value. Loan-to-cost is the loan divided by everything the project costs. ARV is what the property should be worth after the work is done.
The leverage pins on the current program work like this:
- Bridge purchase with no rehab: up to 80% of purchase price.
- Fix-and-flip: 93% of project cost at 5 or more completed projects, 90% of project cost at 2 or more, and 85% of project cost below 2. Every tier is capped at 75% of ARV.
- Cash-out and rate-and-term refinance: up to 65% of value.
- Ground-up construction: up to 90% of cost and 75% of completed value at 3 or more completed projects.
Cost-based figures are not purchase LTVs. The top tier is reserved for experienced investors. There is no true 100% purchase program, and any pitch that implies one is describing a rehab-budget draw, not a purchase loan. Draws are covered below.
Worked Example: Which Cap Binds?
Run the numbers on two hypothetical purchases. These are illustrative models, not market data. Both use a buyer at the 85% tier, meaning fewer than 2 completed projects. Both assume the as-is value equals the purchase price, and both express every figure as a percentage of purchase price so no dollar amount is needed.
| Item | Deal A | Deal B |
|---|---|---|
| Rehab budget | 20% of price | 20% of price |
| Project cost | 120% of price | 120% of price |
| ARV | 140% of price | 125% of price |
| 85% of project cost | 102% of price | 102% of price |
| 75% of ARV | 105% of price | About 94% of price |
| Binding limit | Cost test, 102% | ARV test, about 94% |
| Your cash into the project | 18% of price | About 26% of price |
In Deal A, the cost test is the lower number, so it controls. In Deal B, the finished value is thin relative to cost, so the ARV cap binds. The investor in Deal B needs roughly eight more points of price in cash. Same budget, same price, different outcome.
Notice what moved the answer. It was the after-repair value, not the borrower’s income. A strong plan on a low-margin deal can still leave you writing a bigger check.
What Moves Your Limit Up or Down?
Experience and valuation move the limit more than anything else. The lender’s appetite for the borrower, the property, and the plan all set where inside the range you land. The ceiling printed on a term sheet is a best case, not a promise.
- Completed projects. Documented track record unlocks the 90% and 93% cost tiers. Fewer than 2 means the 85% tier.
- Appraised value. Lenders order an appraisal or a broker price opinion, called a BPO. A BPO is a lighter valuation than a full appraisal. If it comes in below the contract price, the loan is sized on the lower number.
- Rehab size relative to value. A budget that is large next to the as-is value draws scrutiny. Some lenders also want a minimum initial disbursement that a low as-is value can fail to meet.
- Credit. A 620 minimum applies, with additional conditions below 660. A stronger score makes the file easier to place.
- Property type. The program covers 1 to 4 units, and ground-up construction to 10. Commercial, industrial, land, hospitality, and owner-occupied are not on the sheet.
A bigger down payment helps the lender’s cushion, but it does not erase a credit floor or an ineligible property type. The strongest files clear both tests: enough equity in the deal and a believable exit.
What Documents Does a Purchase Require?
Every document answers a lender risk question. Once you see the question, the checklist stops feeling like paperwork for its own sake.
| Document | Group | Why it is requested | Applies when |
|---|---|---|---|
| Government ID | Personal | Confirms who you are | Always |
| Bank statements | Personal | Proves cash for down payment and reserves | Always |
| Real estate owned schedule | Personal | Shows your track record | Always |
| Purchase contract | Property | Fixes price and terms | Always |
| Valuation (appraisal or BPO) | Property | Sets as-is value, and ARV on rehabs | Lender-ordered |
| Scope of work and budget | Property | Shows the plan is real | Rehab deals |
| ARV support and comps | Property | Backs the finished-value figure | Rehab deals |
| Title and insurance | Property | Protects the lender’s lien | Always |
| Entity documents | Entity | Proves the buyer exists and who signs | Entity buyers |
| Exit plan | Plan | Shows how the loan gets repaid | Always |
| Business-purpose affidavit | Compliance | Documents the investment purpose | Always |
Two of these deserve more explanation. Proof of funds is usually bank statements showing enough liquid cash for the down payment and the reserves needed to start the work. Lenders generally look for recent consecutive months, and unexplained deposits slow things down. Source every large deposit before you submit.
The scope of work is the second. Lenders want the contract, a line-by-line budget, how repairs will be paid for, and comps that support the ARV. A budget with round numbers and no detail reads as a guess.
When Is Each Document Needed?
Paperwork arrives in stages, so you can prepare in order rather than all at once. Lenders vary on the exact sequence, but the pattern is consistent.
1. Pre-qualification. ID, a rough real estate owned schedule, and a bank statement. Buyers often attach a lender pre-approval letter to the offer and mark it financed.
2. Term sheet. The purchase contract, the property address, the scope and budget for rehab deals, and a short exit plan.
3. Underwriting. Full bank statements, entity papers, comps, and ARV support. The lender orders the valuation and opens title and insurance.
4. Closing. Insurance binder, title commitment, signed affidavits, and the settlement statement. On rehab deals, the statement shows the rehab holdback retained by the lender until work is inspected.
Skipping a stage rarely saves time. A missing item at stage three simply moves the delay to stage four.
How Does the Paperwork Change by Buyer Type?
Entity buyers add documents, individual buyers add personal guarantees, and rehab buyers add the budget. The core file stays the same. Everything else is layered on.
Entity buyer. Many investors buy through an LLC, subject to lender program eligibility. Expect formation documents, the operating agreement, an EIN letter, and a good standing certificate. Names must match across the contract, the entity papers, the insurance, and the title. A mismatch is one of the most common small errors that stalls a file.
Individual buyer. You sign in your own name, so personal credit and your real estate owned schedule carry more weight.
No-rehab bridge purchase. The file is lighter: contract, valuation, proof of funds, title, insurance, and exit. Leverage can reach up to 80% of purchase price.
Rehab purchase. Everything above, plus scope, budget, ARV support, and your completed-project history. This is also where experience tiers apply.
Off-market or assigned contract. The lender wants the chain of title and the assignment paperwork to show who is actually buying. Clean documents here protect everyone.
How Do Holdbacks and Draws Work?
On a rehab deal, the lender holds back the renovation money and releases it as work is completed. You do not receive the rehab funds up front. Up to 100% of the rehab budget can fund in draws against completed work on the current program, which is a rehab-budget figure rather than a purchase LTV.
The sequence runs the same way on most files:
1. At closing, the settlement statement shows the rehab holdback returning to the lender.
2. You or your contractor complete a phase of work.
3. You submit a draw request with contractor invoices.
4. The lender inspects the work.
5. The lender releases the draw for that phase.
That sequence has a cash-planning consequence. Contractors often want deposits before work starts, so you front money and get reimbursed after inspection. Plan for that float. Many investors underestimate it, and the tight spot usually comes between the first deposit and the first release.
Do I Need Reserves and a Credible Exit?
Yes to both. Reserves are cash left over after closing, and lenders want to see them because a rehab that overruns eats cash first. How much varies by lender, property, and experience.
The exit is how the loan gets repaid. There are two: sell the property, or refinance it. Terms run 6 to 18 months, so the exit plan needs a date that fits. Many investors refinance out of hard money into long-term DSCR financing once the property is leased and stabilized, and Lendmire brokers that path. DSCR means debt service coverage ratio, a test that compares the rent to the full monthly housing payment. Lendmire’s complete DSCR loans guide walks through that second loan.
Line up the take-out before the bridge matures. A slow rehab or a lease-up that lags can push the exit past the maturity date. Lendmire’s piece How to Bridge Vacant Rentals in a Seasonal Market With Hard Money shows how timing risk shows up when leasing is uneven.
What Is the Business-Purpose Paperwork?
Expect a business-purpose affidavit and an occupancy certification on every file. Treat both as required. They document that the property is a rental or investment, not a home you will live in.
The label alone is not enough. The Comptroller’s handbook on truth in lending, from the Office of the Comptroller of the Currency, notes that a checked business-purpose box with no supporting documentation of how the proceeds will be used may be insufficient. An investment property also does not automatically earn an exemption, according to Compliance Alliance, because the purpose of the credit drives the answer. A law-firm note from Hunton adds that lenders face penalties for wrongly classifying a loan.
The practical takeaway is simple. Answer the affidavit truthfully, keep your records tidy, and make sure your documents tell the same story.
Where Do the General Rules Break?
Several situations bend the normal sizing. Knowing them early saves a surprise at term sheet.
- Heavy rehab relative to value. When the rehab is more than double the as-is value, lenders look harder. A low as-is value can also miss a minimum initial disbursement.
- Cash purchase, then a bridge. A buyer who paid cash may be able to take a bridge or cash-out loan with a construction holdback. Sizing then runs on as-is value, and cash-out refinance tops out at up to 65% of value on this program.
- Low appraisal. The loan is sized on the lower of price or value. A contract at a price the appraisal does not support means you cover the gap.
- First-time investors. You qualify at the lower leverage tiers, so expect a larger check than an experienced flipper writes.
- Wrong product. A consumer bridge loan tied to selling a home is not a purchase bridge for a rental.
Why Do Files Stall or Get Declined?
Most problems are paperwork problems, not deal problems. These are the usual culprits:
- Unexplained or very recent deposits in the bank statements.
- Entity names that differ between the contract, the title, and the insurance.
- No insurance binder, or insurance that does not match the property type.
- A budget with round numbers and no detail.
- An ARV with no comps behind it.
- An exit plan that says only “refinance later.”
- A property type outside the program, such as a commercial building or land.
Fix those before you submit. A clean file lets underwriting spend its time on the deal.
Key Terms Defined
Hard money loan: short-term financing secured by the property and sized on its value and the project plan.
Bridge loan: a loan that covers the gap between buying a property and landing longer-term financing.
Loan-to-value (LTV): the loan amount divided by the property’s value.
Loan-to-cost: the loan amount divided by the total project cost, including purchase and rehab.
After-repair value (ARV): the projected value of the property once renovations are complete.
Holdback: rehab money the lender keeps until completed work is inspected.
Draw: a release of holdback funds after a phase of work passes inspection.
Proof of funds: bank statements showing enough liquid cash for the down payment and reserves.
Frequently Asked Questions
How much will a hard money lender lend on a purchase?
It depends on whether there is a rehab. A bridge purchase with no rehab typically reaches up to 80% of purchase price. A fix-and-flip is sized on project cost at 85%, 90%, or 93% depending on completed projects, always capped at 75% of ARV. These vary by lender, property, and experience.
Does a hard money lender check my credit?
Yes. Underwriting is asset-based, but lenders still review credit history, with a 620 minimum score and added conditions below 660. A stronger score and documented experience make a file easier to place.
Can I get a loan for 100% of the purchase?
No. There is no true 100% purchase program. The closest thing is that up to 100% of the rehab budget can fund in draws against completed work, which is a rehab-budget figure. You still bring cash toward the purchase and the early work.
What documents do I need to submit first?
Start with a government ID, recent bank statements, a real estate owned schedule, and the purchase contract. Rehab deals add a scope of work, a budget, and ARV comps. Entity buyers add formation documents, the operating agreement, an EIN letter, and a good standing certificate.
How does a bridge loan get repaid?
Through a sale or a refinance. Terms run 6 to 18 months, interest-only, with no prepayment penalty on the current program. Many investors refinance into long-term DSCR investor loans once the property is stabilized, so line up that take-out early.
What to Prepare This Week
Gather your ID, the last few bank statements, and a current real estate owned schedule. Write the exit plan down in plain terms. If there is a rehab, get a detailed budget and comps for the ARV. Then confirm the entity name matches across every document.
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 arranging financing through select lenders in its wholesale network, across 41 markets including Washington, D.C. Every file is underwritten individually, and nothing here is a commitment to lend. Tax treatment varies; consult a qualified professional.
A bridge loan is only as strong as the exit behind it, so the first document worth drafting is the plan that repays it.
About Lendmire
Lendmire — NMLS# 2371349 — is a DSCR and non-QM mortgage brokerage with investor loan programs in 41 markets, including Washington, D.C. DSCR eligibility is commonly reviewed by the lender around property-level rent rather than personal income documentation, subject to lender guidelines, and the brokerage helps arrange financing for LLC-owned portfolios beyond conventional financed-property limits. Recognized by Scotsman Guide as a Top Mortgage Workplace in 2025 and 2026.
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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. OCC – Comptroller’s Handbook, Truth in Lending Act
2. Compliance Alliance – Regulation Z and Investment Properties
3. Hunton – Beware of “Business Purpose”
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 Hard Money Cover a Fix and Flip Purchase? · Can an Investor Get a Hard Money Loan Without Verifying Income? · Should a Rental Buyer Choose Hard Money or a Non-QM Loan?
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
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.