The Quick Read: A hard money lender sizes a bridge loan on the purchase price or as-is value with no rehab money, and sizes a fix and flip loan on total project cost, capped against after-repair value, with the renovation budget released in draws as inspected work gets finished. Across the wholesale network Lendmire works with, the same two tests show up on nearly every file. How much of the cost will the lender fund? And does the finished value support that number? Figures below vary by lender, property, and experience, and nothing here is a commitment to lend.
- A bridge purchase without rehab typically reaches up to 80% of the purchase price.
- A fix and flip loan typically runs 85%, 90%, or 93% of project cost depending on completed projects, always capped at 75% of after-repair value.
- Up to 100% of the rehab budget can fund in draws against completed work.
- Terms typically run 6 to 18 months, interest-only, with no prepayment penalty.
- The lowest of the lender’s caps sets the loan. Experience moves the cost-based tier. It does not move the value cap.
The Honest Answer on Who Each Loan Is For
A bridge loan is for the investor who needs to own the property now and doesn’t need the lender to fund a renovation. That could be a purchase ahead of a lease-up, a buy before a sale, or a property that needs only light cosmetic work paid from the investor’s own cash. A fix and flip loan is for the investor who wants the lender to carry the purchase and the construction budget, then repay from a sale or a refinance.
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.
Here’s the catch: these labels come from the market, not from a regulator. Lenders use “bridge,” “flip,” and “hard money” loosely, and a hybrid product can carry either name. The useful question is not which label a lender uses. It is what the loan is measured against and whether rehab money is inside it.
Side-by-Side
The column contents below describe how files typically structure across the network. The two names overlap, so confirm in writing what a specific lender means by each.
| Factor | Bridge Loan | Fix and Flip Loan |
|---|---|---|
| Sized against | Purchase price or as-is value | Project cost, capped at after-repair value |
| Network leverage | Up to 80% of purchase price | 85-93% of project cost, 75% ARV cap |
| Rehab money | None inside the loan | Up to 100% of budget, in draws |
| Review basis | Asset, exit plan, credit, liquidity | Asset, scope, experience, liquidity |
| Documentation | Contract or payoff, liquidity proof | Contract, scope, budget, contractor |
| Property types | Non-owner-occupied, 1-4 units | Non-owner-occupied, 1-4 units |
| Entity vesting | Individual or LLC, per program terms | Individual or LLC, per program terms |
| Term structure | 6-18 months, interest-only | 6-18 months, interest-only |
| Reserve expectations | Liquidity shown, varies by file | Liquidity for draw gaps, varies by file |
| Typical exit | Refinance or sale | Sale, or refinance into a rental loan |
How the Lender Actually Sizes Each One
Every short-term loan runs through stacked caps, and the lowest result wins. A lender checks a cost-based cap, a value-based cap, and a credit-and-experience overlay. Whichever produces the smallest number becomes the loan.
Bridge sizing is the simpler build. The lender starts with the lesser of purchase price and as-is value, then applies its bridge cap. In the network that cap tops out at 80% of purchase price for a purchase with no rehab. Refinances are tighter, with cash-out and rate/term refinances at up to 65% of value. No holdback exists, so the investor funds any repairs from their own pocket.
Flip sizing has two buckets. The acquisition advance funds at closing. The rehab budget sits in escrow and reimburses as work is completed and inspected. The cost-based leverage is tiered by documented completed projects: 93% of project cost at five or more, 90% at two or more, and 85% with fewer than two. The top tier is reserved for experienced investors. Every tier is then capped at 75% of after-repair value. First-time investors can qualify at the lower tiers, with a 620 minimum credit score and added conditions below 660.
One more distinction matters. The rehab figure, up to 100% of the budget in draws, is a rehab-budget number. It is not a purchase LTV, and nobody gets a true 100% purchase program.
One Property, Two Structures
Run the numbers on one hypothetical property. These are modeled index points, not dollars or market data. Say the purchase price is 100, the rehab budget is 30, and the finished value is 160.
As a bridge purchase: 80% of purchase price is 80. The investor funds the 30 of repairs, and the lender sees no scope of work.
As a flip at the 90% tier: project cost is 130, and 90% of that is 117. The ARV cap is 75% of 160, which is 120. The cost test is lower, so the cost test binds and the loan is 117.
If the after-repair value comes in at 150: the ARV cap falls to 112.5, which is now below 117. The value cap binds, and the investor covers the gap. That is how the same project can shrink by a few points without any change in the borrower’s credit or experience.
What the middle case teaches: a property needing modest work can sit in either box. If the investor wants the lender to fund the repairs, the file belongs in the flip structure, with a scope of work and a contractor. If the investor will pay for repairs and wants the simplest file, the bridge structure often fits better.
When a Bridge Loan Is the Better Fit
A bridge loan is the better fit when the property doesn’t need lender-funded construction. It also fits when the investor’s priority is a clean, asset-focused file.
- Light cosmetic work paid in cash. Without a holdback, there are no draws, inspections between phases, or contractor package to coordinate.
- A rental that needs time to stabilize. A bridge buys time for a lease and seasoning before a long-term loan takes over.
- A buy-before-you-sell timing gap. The lender looks at the asset and the exit rather than a renovation plan.
- A deal where the value cap would bind anyway. If the finished value won’t support the cost-based number, the extra structure of a flip loan buys little.
The tradeoff is cash. A bridge leaves all repairs to the investor, so liquidity at closing is higher than on a flip loan. And a bridge purchase at up to 80% of purchase price funds none of the work, so the investor’s total cash need can exceed what the headline leverage suggests.
When a Fix and Flip Loan Is the Better Fit
A fix and flip loan is the better fit when the renovation is the business plan and the investor wants the lender carrying the construction budget.
- Real rehab on a documented scope. Up to 100% of the rehab budget can fund in draws, which can sharply cut out-of-pocket cash.
- Experienced investors using the top tier. At five or more completed projects, 93% of project cost is the highest leverage on the cost side. It is still capped at 75% of after-repair value.
- A tight sale exit. The loan is sized to the finished value the investor expects to sell into.
The tradeoffs are real. Draws reimburse finished work, so the investor floats costs between inspections. A rehab overrun lands on the investor’s own cash. And the ARV cap means an optimistic projection can quietly shrink the loan at appraisal.
Market data adds context. ATTOM’s latest flipping report puts the typical flip margin at 21.5% and the typical flip’s time from purchase to resale at 161 days. Those are gross figures, so budget for carrying costs and review the loan’s term against the real schedule. Tax treatment varies; consult a qualified professional.
What Happens When the Numbers Shift
Low appraisal or ARV. The value cap tightens and the loan shrinks. The investor funds the difference, renegotiates the price, or trims the scope.
Rehab overrun. The holdback is a fixed commitment. Additional costs fall to the investor, which is why liquidity matters on flip files.
A flip that stalls. Many investors refinance out of hard money into long-term DSCR financing once the property is stabilized, and Lendmire brokers that path. The takeout lender uses its own appraisal and rent figure rather than the investor’s ARV estimate, so a loan funded near its cap may not clear. Lendmire’s complete DSCR loans guide explains how that second loan is reviewed.
How Experience, Credit, and Documentation Change the Outcome
Underwriting stays asset-based. Lenders look at the property, the plan, and the exit before they look at income paperwork. Experience still matters, because it sets the cost-based tier on a flip. The same deal can land at 85%, 90%, or 93% of project cost depending on documented completed projects.
Credit matters too. Across the network a 620 score is the minimum, with extra conditions below 660. Loans run up to $5,000,000, with larger by exception. Documentation differs by structure. A flip file adds a scope of work, a budget, and a contractor on top of the purchase contract and proof of liquidity. A bridge file is thinner.
Key Terms Defined
Loan-to-cost (LTC): the loan amount divided by the purchase price plus the rehab budget.
After-repair value (ARV): the estimated value of the property once renovations are finished.
As-is value: what the property is worth in its current condition, before any work.
Holdback: the rehab money held in escrow and released in draws after inspected work.
Binding constraint: whichever cap produces the smallest loan amount and so sets the loan.
A Short Note on Business Purpose
Hard money loans are designed for non-owner-occupied investment properties, and because they are business-purpose loans, they are reviewed differently from a standard owner-occupied mortgage. Per CFPB Regulation Z guidance, credit to acquire an owner-occupied rental is generally business-purpose only above two units. Compliance Alliance explains that Regulation Z looks at the purpose of the loan, not the property type. Using an LLC, subject to lender program eligibility, does not by itself prove business purpose.
The Balanced Verdict
Choose the bridge when the property needs little or no lender-funded work and the investor has the cash. The file is simpler, and the main test is purchase price or as-is value. Choose the flip loan when renovation is the plan and the lender’s draws will carry it, accepting the ARV cap and the float between inspections. If the deal sits between the two, the better question is not which label to use but which cap would bind.
Run the cost test, then the value test, then the exit test. If a refinance is the exit, size the first loan backward from what the second lender will appraise and what the rent will support. For help comparing both structures, Lendmire arranges hard money financing in 41 markets, including Washington, D.C., through its wholesale network. 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.
Frequently Asked Questions
Is a bridge loan hard money?
Often, yes, when it is a private, asset-based, short-term business-purpose loan. The term hard money describes the lender type and the underwriting style more than a loan product, which is why a bridge and a flip loan can both carry the label.
Is a fix and flip loan just a bridge loan with rehab added?
Structurally, close. Both are short-term, asset-based, and interest-only, but a flip loan adds a rehab holdback, a scope of work, and an ARV cap. A bridge is sized on purchase price or as-is value and funds no construction.
Does a flip loan fund the rehab at closing?
No. The acquisition advance funds at closing, and the rehab budget is held in escrow and released in draws as completed work is inspected. Up to 100% of the rehab budget can fund this way, varying by lender, property, and experience.
What if the after-repair value comes in lower than expected?
The 75% ARV cap tightens and the loan shrinks. The investor typically covers the gap, renegotiates the purchase, or reduces the scope. That is why running the ARV test before making an offer matters.
Can I move from a flip loan into a rental loan?
Often, yes. Many investors refinance into long-term DSCR financing after stabilization. The new lender uses its own appraisal and rent figure, so the payoff must clear on those numbers, subject to lender guidelines.
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.
Hard money often opens the deal, and a refinance typically closes the chapter – see the hard money loan overview.
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References
1. attomdata.com: Home Flipping Profits Continue Gradual Two Year Decline
2. CFPB Regulation Z, Section 1026.3
3. Compliance Alliance, Regulation Z and Investment Properties
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 Fix and Flip Minimum Loan Amount Requirements · Is a Hard Money Fix-and-Flip Loan Worth It on a Single-Family Home? · How to Get a Hard Money Loan for a First Flip With No Track Record
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.