The Quick Read: Usually yes, but the down payment is not a flat percentage of the purchase price: a hard money lender funds part of your project cost, often most of the rehab budget, caps the total loan against after-repair value, and expects you to cover the gap plus closing costs and reserves. A true zero-cash deal is rare. Where it exists, it rests on a very strong deal and a strong borrower.
- Most flip loans are sized on project cost, not on purchase price alone.
- Every tier is capped at 75% of after-repair value, so a thin-margin deal needs more of your cash.
- More documented completed projects means a higher share of cost financed.
- Up to 100% of the rehab budget can be funded in draws, but that is not the same as financing the whole deal.
- Closing costs, interest carry and early rehab spending usually come out of your pocket on top of the down payment.
This article covers the mechanics, the exceptions, and what to do if your cash is short. The program figures come from the hard money programs Lendmire places files with. They vary by lender, property, and experience, and none of them 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.
Key Terms Defined
Several terms do most of the work in this topic. Here they are once, so the rest of the article can use them freely.
- Loan-to-cost (LTC): the loan as a share of total project cost, meaning purchase price plus the rehab budget.
- Loan-to-value (LTV): the loan as a share of the property’s value. On a bridge purchase with no rehab, that value is the purchase price. LTV is a risk measure: the higher it climbs, the more risk the lender carries, and a larger down payment pulls it down.
- After-repair value (ARV): what the property should be worth once the renovation is finished.
- Draw: a payment released from the rehab holdback after the lender confirms a stage of work is done.
- Proof of funds: bank or brokerage statements showing you hold the cash the deal requires.
- Cross-collateral: pledging a second property you own, usually one with no debt on it, as extra security in place of some cash.
Why Lenders Ask for Your Money
Hard money is short-term financing secured by the property and made by private lenders. The lender lends against the asset, not your paycheck.
That structure explains the down payment. If the flip goes badly, the lender sells the house. Your cash is the cushion that absorbs a bad renovation, a soft market, or a cost overrun before the lender takes a loss. It also keeps you invested in finishing the job (lenders call this skin in the game). The lender is underwriting the property, the plan, and the exit, and your equity is part of all three.
One more point. Hard money loans for investors are business-purpose loans on non-owner-occupied property. They are judged on the project, not on how a homebuyer’s mortgage would be judged.
What the Percentage Is Actually Based On
Here is where most people get confused. The word down payment implies a percentage of the purchase price. On a flip, the lender runs several tests at once and the tightest one wins.
Across the programs Lendmire works with, fix-and-flip leverage is tiered by documented completed projects:
- 5 or more completed projects: up to 93% of project cost.
- 2 or more completed projects: up to 90% of project cost.
- Fewer than 2 completed projects: up to 85% of project cost.
Every tier is also capped at 75% of ARV. Up to 100% of the rehab budget can be funded in draws as work is completed. That last number is a rehab-budget figure. It is not a purchase-price figure. These ranges vary by lender, property, and experience, and the top tier is reserved for experienced investors.
So your real cash requirement is the total project cost minus whatever the loan covers, then plus fees and reserves. Two ceilings, cost and ARV, decide which one binds.
A Flip Sized Three Ways
Run the numbers on a modeled flip. These are illustrative assumptions, not market data. To avoid dollar math, everything below is a percentage of ARV.
Assume the purchase price is 65% of ARV and the rehab budget is 15% of ARV. Total project cost is 80% of ARV.
| Experience tier | Financed share of cost | Loan as % of ARV | Your gap (% of ARV) |
|---|---|---|---|
| Fewer than 2 projects | 85% | 68% | 12% |
| 2+ projects | 90% | 72% | 8% |
| 5+ projects | 93% | 74.4% | 5.6% |
All three loans sit under the 75% ARV cap, so cost-based leverage controls. Your gap shrinks as your track record grows. Closing costs and reserves come on top of that gap.
Now change the deal. Say the purchase price is 75% of ARV, the rehab is 15% of ARV, and total cost is 90% of ARV. A 93% cost-based loan would be 83.7% of ARV. That blows through the cap. The ARV ceiling takes over, the loan stops at 75% of ARV, and your gap is 15% of ARV, which is about 16.7% of project cost. Even a five-project investor ends up well below 93% financed.
That is the whole lesson. A thin-margin deal costs more cash, whoever you are. A deal bought well under value can push the cost-based number to the top of the tier. (This is why experienced flippers talk about margin before they talk about lenders.)
How the lender reads your ARV matters too. Weak or distant comparable sales can pull the number down.
Down Payment vs. Total Cash You Need
The down payment is only the largest line. The cash you need in the bank is bigger. Budget for these items:
- The gap between the loan and project cost, as shown above.
- Lender fees and third-party costs such as title, insurance, and appraisal.
- Interest carry, since payments are interest-only and start right away.
- Early rehab spending. Draws reimburse completed work, so you often float the first stage.
- A buffer for overruns and a slow sale.
Lenders typically verify liquidity with proof of funds and look at it next to your experience. Many lenders also want to see enough cash left after closing to cover the carry and part of the renovation. Exact reserve expectations vary by lender and deal, so ask for them in writing before you commit to a contract.
Short version: someone who wires the down payment and has nothing left is a riskier borrower than someone who brings a little more and keeps a cushion.
Does 100% Financing Exist?
For the purchase, no. There is no true 100% purchase program in the programs Lendmire places files with. What exists is easy to mistake for it.
Up to 100% of the rehab budget funds in draws. That sits on top of a purchase loan that is below 100%, and the whole package must still fit under the ARV cap. Some lenders elsewhere advertise 100% programs. Those depend on a very strong deal, strong credit, deep experience, or extra collateral. Treat the claim as an exception to test, not a plan.
Here are the honest routes to a smaller cash requirement:
- Buy at a real discount. The ARV cap then leaves room for a high loan-to-cost.
- Build a track record. Documented completed projects move you up the tiers.
- Bring a partner. An equity partner who owns part of the deal is a cleaner zero-down route than stacking gap debt. A primary lender that discovers a second lien may cut leverage or end the file.
- Offer cross-collateral. A debt-free property can substitute for some cash at some lenders.
Skip hidden second loans on the down payment. They tend to surface in underwriting, and they surface badly.
What Changes the Amount
Several factors move your cash requirement. Lenders weigh them together.
Experience. This is the biggest lever in the tier structure above. First-time investors qualify at the lower leverage tiers, so expect to bring more cash on a first flip.
Credit. Across the programs Lendmire places files with, the minimum score is 620, with additional conditions below 660. Underwriting stays asset-based, so the property, plan, and exit still lead. Credit can nudge terms in the borrower’s favor.
Deal quality. Margin, comps, and the realism of the rehab budget decide whether the ARV cap or the cost-based tier controls.
Project type. A bridge purchase with no rehab is sized differently, at up to 80% of purchase price. A flip with a rehab budget uses the cost-based tiers. Ground-up construction has its own tiers. Collateral is non-owner-occupied residential property with 1 to 4 units, and construction can go to 10 units.
Loan size. Loans run up to $5,000,000, with larger amounts by exception. Smaller balances vary by lender.
Hard Money vs. Bank Financing on the Down Payment
| Factor | Hard money flip loan | Bank purchase loan |
|---|---|---|
| Sized on | Project cost and ARV | Purchase price or value |
| Rehab money | Held back, paid in draws | Usually not included |
| Term | 6 to 18 months | Long-term |
| Payments | Interest-only | Amortizing |
| Main focus | Property, plan, exit | Borrower income and credit |
Bank financing is income-driven and built for long-term holds. Hard money is deal-driven. Neither one asks for nothing.
What If the Numbers Don’t Work
Three common problems, and what to do about each.
The appraisal or ARV comes in low. The ARV cap shrinks the loan, and the shortfall lands on you. Stress-test your deal at a lower ARV before you remove contingencies. If the margin disappears at a lower value, that is useful information.
You are short on cash. Reduce the rehab scope, renegotiate the price, bring in an equity partner, or wait and build liquidity. Pulling cash from a credit card or stacked gap debt looks like weakness to a lender.
You have no track record. Expect the 85% tier. Document anything you have completed, including rehabs done for yourself or partners, and be ready to explain your scope of work, budget, and timeline. A realistic plan matters more than a confident one.
Planning the Exit Before You Buy
Hard money is short-term by design. The 6-to-18-month interest-only structure, with no prepayment penalty, only works if you know how you leave. There are two exits: sell, or refinance and hold.
Many investors keep a stabilized flip as a rental and refinance out of hard money into long-term DSCR financing. Lendmire brokers that path. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Test the rent against taxes, insurance, and the full monthly obligation before you buy, not after. Remember also that clearing a coverage number is not the same as positive cash flow, because repairs, vacancy, and management sit outside the calculation. The cash you leave in the deal on the bridge loan also reduces what you have for reserves and closing costs on the refinance. Lendmire’s complete DSCR loans guide walks through that second half of the plan.
Pre-Call Checklist
Have these ready before you speak to any lender:
1. The purchase contract and your realistic ARV, with comparable sales.
2. A scope of work and itemized rehab budget.
3. Proof of funds that covers the gap, fees, and carry.
4. A summary of completed projects, with dates and results.
5. Entity documents, if you buy through an LLC (subject to lender program eligibility).
6. A written exit plan, with a backup.
Ask each lender three questions: what the percentage applies to, what the ARV cap is, and what you must show after closing.
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 through the quote form.
Frequently Asked Questions
Can I get a flip with nothing down?
Rarely. What exists is a loan that can fund up to 100% of the rehab budget in draws, on top of a purchase loan below 100%. Even then, fees, interest carry, and early rehab costs need cash.
Is the down payment based on purchase price or ARV?
Neither alone. The lender sizes the loan on project cost, then caps it at 75% of ARV. Whichever number is lower sets the loan, and your down payment is project cost minus that loan. Thin-margin deals hit the ARV cap first.
How much does experience change the cash I need?
A lot. The financed share of cost runs 85% with fewer than 2 completed projects, 90% with 2 or more, and 93% with 5 or more. Every tier is subject to the 75% ARV cap, and terms vary by lender, property, and experience.
Does credit score matter on a flip loan?
Yes, but less than the property and plan. A 620 minimum applies across these programs, with additional conditions below 660. Credit does not replace asset-based underwriting.
Can a different property count toward the down payment?
At some lenders, yes. Cross-collateral on a debt-free property can stand in for some cash. Availability depends on the lender and the file, so ask before you assume it.
For current guidelines and terms, see Lendmire’s hard money loan programs page.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker. It arranges investor financing through select lenders in its wholesale network, across 41 markets including Washington, D.C. Lendmire does not lend directly. Programs change, and every file is underwritten individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
2. 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: How a Hard Money Lender Counts a Seller-Financed Down Payment · How Much a Hard Money Lender Will Lend on a Fix-and-Flip · National vs Local Hard Money Lender for a Fix-and-Flip Investor
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.