The Quick Read: Rarely. A hard money loan can fund up to 100% of a documented rehab budget through draws. The purchase side is advanced at a lower percentage, topping out at 93% of project cost for experienced investors. The total loan is also capped against after-repair value, and you still bring cash for equity, fees, interest, and early rehab spending. A lender that advertises “100% financing” almost always means 100% of the renovation, not of the whole project. Whichever limit is lower sets your real loan.
- The purchase advance is a percentage of project cost, tiered by how many projects you have completed.
- Every tier is capped at a share of after-repair value (ARV), the estimated worth of the finished property.
- Rehab money is held back and released in draws after work is done.
- Lender fees, closing costs, interest, and reserves generally come out of your own cash.
- Terms vary by lender, property, and experience, and nothing here is a commitment to lend.
What Does “Full Cost” Actually Mean?
“Full cost” is not one number. It is five costs that get funded in different ways, and the loan treats each one differently.
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.
| Cost | Does the loan cover it? | When it shows up |
|---|---|---|
| Purchase price | Partly, below 100% | At closing |
| Rehab budget | Up to 100% of budget | In draws |
| Lender and closing fees | Generally not | At closing |
| Interest carry | You pay it | During the hold |
| Reserves | Your liquid cash | Before and after closing |
A flip that “has no money down” on paper can still need serious cash on the day the file closes. Title, insurance, and appraisal charges are third-party costs, and lenders generally do not roll them into the loan. Nav’s comparison of 100% financing lenders says whether a down payment is required depends on the lender, the deal structure, and the borrower’s experience. That matches what the wholesale network shows.
Key Terms Defined
Loan-to-cost (LTC) is the share of your total project cost, purchase plus rehab, that the lender advances.
After-repair value (ARV) is the estimated market value of the property once the renovation is finished.
Loan-to-ARV is the total loan as a share of that finished value. It is the ceiling that most often overrides the headline percentage.
Draw is a payment from the lender’s holdback, released in stages after completed work is verified.
Holdback (rehab escrow) is the renovation money the lender sets aside at closing and does not hand to you up front.
Reserves are liquid cash you show you can access after closing, so the project survives a surprise.
The Two Limits That Size the Loan
Every hard money flip loan is sized by two tests, and the lower result wins. The first test is a loan-to-cost advance. The second is a cap on the total loan against ARV.
Across the wholesale network where Lendmire places files, the cost test is tiered by documented completed projects. You can see the pattern in the table below. These are typical figures that vary by lender, property, and experience.
| Experience | Advance (of project cost) | Total loan cap |
|---|---|---|
| Fewer than 2 projects | 85% | 75% of ARV |
| 2 or more projects | 90% | 75% of ARV |
| 5 or more projects | 93% | 75% of ARV |
The top tier is reserved for experienced investors. Bridge purchases with no rehab typically reach up to 80% of purchase price, and cash-out or rate-and-term refinances typically reach up to 65% of value. None of these is a 100% purchase program. There isn’t one in this network.
Lenders confirm ARV with an appraisal or a broker price opinion, according to REInvestor Guide’s walkthrough of flip lending. Because the number drives the whole loan, ARV credibility matters more than almost anything else in your package.
Market surveys also show lenders advertising up to 100% of purchase plus 100% of rehab, with an ARV cap of about 80%, per Nav. In Lendmire’s network, the top tier is 93% of project cost under a 75% ARV cap.
A Deal That Fits
A deal fits when the cost test is the binding limit. Run the numbers with a modeled deal, stated as a share of ARV so the math stays clean.
Say the purchase price equals 60% of ARV and the rehab budget equals 20% of ARV. Project cost is 80% of ARV.
- At the 85% tier, the advance is 68% of ARV.
- At the 90% tier, it is 72% of ARV.
- At the 93% tier, it is about 74% of ARV.
All three sit under the 75% ARV cap, so the cost test sets the loan. The gap is your cash, which runs from about 6% to 12% of ARV depending on tier, before fees and interest. This is a strong deal. A spread between all-in cost and finished value that is wide enough to clear the cap is what lenders want to see.
A Deal That Doesn’t Fit
Now change the inputs. Purchase equals 65% of ARV and rehab equals 25% of ARV. Project cost is 90% of ARV.
Even at the 93% tier, the cost test alone points to a loan above the cap. The 75% of ARV cap sets the loan instead. The unfunded gap is 15% of ARV, plus fees and interest. The deal passed the cost test and failed the ARV test.
Investors usually have three levers:
1. Renegotiate the purchase price. Every dollar off the price shrinks the gap by a dollar.
2. Trim the scope. Cut the upgrades that do not move ARV.
3. Add capital on purpose. Bring the cash, or bring a partner.
If the margin between all-in cost and ARV is thin, the honest answer may be to pass on the deal. A Chamber of Commerce explainer on fix and flip loans warns that some lenders advertise 100% purchase plus 100% renovation but cap the loan at a share of ARV. That cap makes the real loan much smaller than the headline.
Closing-Day Cash, Draws, and Out-of-Pocket
The most useful way to plan a flip is to sort every dollar into one of three buckets. Most investors only budget the first.
| Bucket | What lands in it |
|---|---|
| Due at closing | Equity below the advance, lender fees, title, insurance, appraisal |
| Funded in draws | The documented rehab budget, released after verified work |
| Out of pocket during the hold | Interest-only payments, per-draw costs, overruns, contingency |
The rehab money is not available on day one. The acquisition portion funds at closing. The renovation budget goes into a lender-controlled holdback and is released in stages as an inspector verifies progress.
That sequence creates a timing gap. You pay the contractor first, then request reimbursement with photos or an inspection. So you need working capital to fund the first phase of work, plus a buffer. A contingency in the range of 5% to 10% of the rehab budget is a common planning cushion, and it should come from cash, not from draws.
Draw handling varies by lender. Terms on interest for undrawn funds, stored materials, and whether any rehab money is advanced at closing differ from one lender to the next. Confirm those in writing.
Closing the Gap When the Loan Falls Short
When the loan does not cover everything, you have options. They are not equal.
| Option | Upside | Trade-off |
|---|---|---|
| Lower price or smaller scope | More affordable fix | Needs a flexible seller |
| Your own cash | Simplest structure | Ties up liquidity |
| Equity partner | Shares the capital burden | Shares the profit |
| Collateral on another property | Can reduce cash needed | Puts that property at risk |
| Second loan behind the first | Can cover the gap | Needs lender consent |
A second note deserves extra care. An undisclosed loan behind the primary lender can create serious problems. A disclosed one often leads the primary lender to cut leverage or decline the file. Lenders do allow seller or secondary financing by exception, so ask before you assume.
An equity partner is often the cleanest path for a zero-down structure. The partner funds the gap and you split the result. It costs profit, but it does not stack debt on a project that is already highly leveraged.
What Full Leverage Does to Your Risk
Maximum leverage leaves almost no cushion. Four things can go wrong, and each one hits harder when you have little equity in the deal.
- Overruns. Costs that exceed the budget come out of your pocket, not the loan.
- A lower appraisal. If ARV comes in under your estimate, the 75% cap shrinks the loan, and the gap grows.
- A longer hold. Terms run 6 to 18 months, interest-only, with no prepayment penalty. Every extra month adds carry.
- A stranded exit. A budget that works only if the appraisal lands exactly on target is a weak plan.
The last one matters most for flip-and-hold investors. Many investors refinance out of hard money into long-term DSCR financing once the property is stabilized, and Lendmire brokers that path. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Over-leveraging the flip can leave you with little equity when it is time to refinance. The complete DSCR loans guide explains how that exit is underwritten.
Here is a genuine toss-up. Some investors with a high tier want to use all the leverage available to preserve cash. Others deliberately put in more equity to protect the refinance. The first approach frees capital. The second leaves room for an appraisal miss. Neither is wrong, but the second is usually safer on a first or second flip.
How to Read an “Up To” Leverage Claim
The words “up to” carry the whole headline. Before you take any lender’s percentage at face value, ask these questions.
1. Is the percentage applied to purchase price, rehab, or total project cost?
2. What is the ARV cap on the total loan?
3. Is the rehab budget in the loan, or does the loan cover the purchase only? Not every hard money loan includes renovation funds.
4. Which fees and closing costs are not covered?
5. How are draws requested, inspected, and funded, and is there a per-draw cost?
6. How does my completed-project count change the tier?
7. How much liquidity and reserves do you want to see?
Ask for the answers in writing. A lender that cannot explain its ARV cap is not a lender to build a deal around.
What Lendmire’s Network Looks Like
Lendmire is a mortgage broker that arranges hard money financing through select lenders in its wholesale network, across 41 markets, including Washington, D.C. Several parameters matter for your planning. They vary by lender, property, and experience, and every file is underwritten individually.
- Collateral: non-owner-occupied residential property of 1 to 4 units. Ground-up construction can go up to 10 units.
- Loan size: up to $5,000,000, with larger balances by exception.
- Credit: a 620 minimum score, with additional conditions below 660. First-time investors qualify at the lower leverage tiers.
- Term: 6 to 18 months, interest-only, with no prepayment penalty.
- Underwriting: asset-based. The lender reviews the property, the plan, and the exit.
Hard money is not “no underwriting.” Credit, experience, the exit plan, and ARV all get reviewed. The loan is simply focused on the asset instead of your income.
Should You Fund the Full Project?
Try this short checklist before you chase maximum leverage.
- Your ARV is supported by comparable sales, not hope.
- Your rehab budget is documented, with a contingency held in cash.
- You can cover the first draw phase out of pocket and still hold reserves.
- Your all-in cost sits far enough under ARV to clear the cap with room to spare.
- You have a refinance or sale exit that still works if the appraisal comes in low.
If you can check all five, the highest tier you qualify for can make sense. If you cannot, plan to put cash in on purpose. That is a decision, not a failure.
Tax treatment varies; consult a qualified professional.
Frequently Asked Questions
Can a hard money loan cover both purchase and rehab?
Yes, in part. The loan advances a percentage of project cost, and the rehab portion is released in draws, up to 100% of the documented budget. The purchase advance stays below 100%, and the total is capped against ARV.
Do I need a down payment on a flip?
Almost always. In Lendmire’s network the advance runs from 85% to 93% of project cost depending on experience, so the remainder is your equity. The lower tiers apply to first-time investors. Terms vary by lender, property, and experience.
Are closing costs and lender fees financed?
Generally not. Lender fees and third-party charges for title, insurance, and appraisal are usually paid in cash at closing. Ask for an itemized estimate before you commit.
When do rehab funds arrive?
After closing, in stages. The renovation budget sits in a holdback and is released as completed work is verified. You usually pay for each phase first and get reimbursed.
Why is my loan smaller than the advertised percentage?
Usually the ARV cap is the binding limit. The lender sizes the loan on both cost and finished value and uses the lower number. If your all-in cost is close to ARV, the gap becomes your cash.
Next Steps
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. You can request a quote at 828-256-2183.
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.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your investment property. No commitment required.
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. Nav: hard money loans and 100% financing
2. REInvestor Guide: hard money loans and flip success
3. Chamber of Commerce explainer: what is a fix and flip loan from a hard money lender
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 to Get Rehab Draws Released on a Hard Money Loan · Hard Money Loan Preapproval Documents Before You Make Offers · Hard Money Flip Loan vs Private Money for a First-Time Investor
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
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.