The Quick Read: Usually yes, because hard money and bridge lenders size the loan as a share of the project’s cost or value, and you cover the rest with cash or, at some lenders, equity in another property. The size of that share depends on your experience, the deal, and the lender. A few points matter most:
- Fix-and-flip loans are typically sized as a percentage of total project cost, with tiers tied to how many projects you have completed.
- Every fix-and-flip tier is also capped at 75% of after-repair value, which can raise your cash in on thin deals.
- Bridge purchases without rehab typically go up to 80% of the purchase price.
- Up to 100% of the rehab budget can fund in draws, but you front the work first.
- No true 100% purchase program exists, so plan for cash to close well beyond the headline down payment.
All of this varies by lender, property, and experience, and nothing here 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.
Why Lenders Want Your Cash in the Deal
The reason is collateral. A hard money bridge loan is asset-based, which means the lender leans on the property, the plan, and the exit rather than your traditional personal-income documentation. That makes the property the lender’s only real protection.
If you put in nothing, the lender carries all the risk of a value miss. Your cash does two jobs. It creates a cushion if the property sells for less than hoped, and it keeps your interests lined up with the lender’s.
Asset-based does not mean unlimited. Across the wholesale network of lenders Lendmire works with, leverage caps are the main control. The down payment is simply whatever those caps leave uncovered.
Hard money and bridge also overlap more than the labels suggest. Hard money describes where the capital comes from, while bridge describes what the loan is for: a short-term loan that covers the gap until a property is stabilized, sold, or refinanced. In practice, one loan is often both, and the down payment follows the lender’s leverage rules, not the label.
What the Leverage Tiers Look Like
Hard money in this network is sized mostly on cost, not value. Here is the typical structure on files Lendmire places, always varying by lender, property, and experience:
| Transaction | Typical maximum | You cover |
|---|---|---|
| Fix-and-flip, 5+ completed projects | 93% of project cost | About 7% |
| Fix-and-flip, 2+ completed projects | 90% of project cost | About 10% |
| Fix-and-flip, fewer than 2 projects | 85% of project cost | About 15% |
| Bridge purchase, no rehab | Up to 80% of purchase price | At least 20% |
| Cash-out or rate/term refinance | Up to 65% of value | Your equity cushion |
| Ground-up construction, 3+ projects | Up to 90% of cost | About 10% |
Every fix-and-flip tier also carries a cap of 75% of after-repair value. Ground-up construction at that experience level carries a 75% cap on completed value.
Read the table with care. Those percentages describe loan-to-cost on the flip and construction rows, not loan-to-value. The top tier is reserved for experienced investors, and first-time investors qualify at the lower leverage tiers.
The “you cover” column is a floor, not a promise. Whichever cap binds first, cost or after-repair value, sets your real cash in.
How the Down Payment Gets Calculated
Start by asking which yardstick the lender uses. There are three, and they give different answers on the same deal.
Loan-to-cost compares the loan to your purchase price plus your rehab budget. Loan-to-value compares it to what the property is worth today. After-repair value is the estimated worth once the work is done.
Here is a modeled example. These are assumptions, not market data. Say you are a newer investor with fewer than 2 completed projects, so the cost tier is 85% of project cost. Run two versions of the same flip.
Version one: the finished value is modeled at 1.3 times your total cost. The 75% after-repair cap then allows a loan larger than the cost tier does, so it does not bind. The 85% cost tier controls, and you cover about 15% of the project.
Version two: the finished value is modeled at only 1.1 times your total cost. Now the 75% after-repair cap allows a loan of about 82.5 cents per dollar of cost. That is tighter than the cost tier. Your cash in climbs to about 17.5%.
Same borrower, same tier, different down payment. A thin deal costs you more cash.
Now picture a veteran flipper with 5+ completed projects at the 93% tier. On the thin deal, that same after-repair cap still limits the loan to about 82.5 cents per dollar of cost. Experience raises the ceiling, but a weak spread can still pin you well below it.
One more wrinkle: in hard money, the purchase price generally counts as the value. A below-market contract price does not shrink your down payment. Buy a $200,000 house for $150,000 and most lenders still start from the contract price, not the discount.
Down Payment Is Not Cash to Close
The down payment is only one line in your cash needed at closing. Treat these as separate buckets:
- The equity share: the percentage the leverage cap leaves uncovered.
- Lender fees: these vary by lender and sit outside the down payment.
- Insurance, title, and appraisal costs: all due at closing.
- Fronted rehab money: you pay for work first, then get reimbursed.
- Interest reserves or carry: hard money is interest-only, so you carry the monthly interest while the project runs.
The rehab piece trips up many first-timers. Up to 100% of the rehab budget can fund in draws against completed work. That is a rehab-budget figure, never a purchase leverage number.
The mechanics are simple. You finish a stage, the lender verifies it, and money flows back to you. Until then, you or your contractor’s credit carries the first stretch of work. Budget for that float, because it is cash you need on hand even on a structure that looks generous on paper.
Tax treatment varies; consult a qualified professional.
Lenders also want to see where your cash comes from. Expect to show proof of funds for the amount due at closing, usually through recent account statements. Money that appears from nowhere right before closing raises questions. A lender reviewing your file wants the equity to be genuinely yours, so borrowed down payment funds are a conversation to have with the lender early, not a surprise to spring late.
Can Equity in Another Property Stand In?
Sometimes. Some lenders will take additional collateral, such as a free-and-clear or low-balance property you already own, in place of part of the cash. This is called cross-collateralizing, and it depends entirely on the lender.
The logic is straightforward. The equity you can pledge is the other property’s value minus the debt against it. Lenders typically want a cushion left over, so they will not count every dollar of that equity.
Expect extra work. The lender may want valuations on both properties and a lien on the second one. A fuller explanation of how gap money works sits in Lendmire’s piece Seller Carry vs. Larger Down Payment for a DSCR Investor Using Gap Money.
The tradeoff is real, and the call is a genuine toss-up. Pledging equity keeps your cash free for the next deal. But if the project fails, the second property is exposed, and the lender’s motive for taking it is precisely to be able to take it on default. A cash-poor investor with strong equity elsewhere may reasonably choose it. An investor with thin margins on the deal may be better off bringing cash.
Is Zero Down Real?
Not as a purchase structure. The program has no true 100% purchase financing, and anything pitched that way deserves a close read.
What people usually mean is 100% of the rehab budget, funded in draws. That money reimburses work you have already paid for. It is not money toward the purchase, and it does nothing about closing costs or fees.
Another version of zero down is a deal where you pledge other property so you bring little cash. That is not free money either. You traded cash for exposure, and the lender will still size the loan within its cost and value caps.
A third version involves the seller. When a seller finances part of the price, your down payment may shrink, though the lender will want to know how the seller’s piece is structured. That is a lender-by-lender call.
Credit still plays a role. Underwriting stays asset-based, but the network has a 620 minimum score, with additional conditions below 660. Lower leverage tiers are where newer investors usually land. Low-down structures tend to ask more of the borrower, and the more leverage you want, the more experience you need to show.
Does Business-Purpose Status Change the Answer?
Only in a way that favors the lender’s discretion. Hard money loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage.
Federal examination procedures treat credit to acquire or improve non-owner-occupied rental property as business purpose credit. That is why no consumer-style down payment rules dictate the number. The lender decides based on risk.
Occupancy matters, though. If you plan to live in one unit, the classification can change. A compliance trade explainer notes that owner-occupied rental acquisitions count as business purpose only when the property has more than 2 units. Hard money in this network is for non-owner-occupied residential property, one to four units, with ground-up construction up to ten units. Owner-occupied deals sit outside it.
A Broker’s Read on What Moves Your Number
Across the wholesale network, the lenders that offer the most leverage ask the most of the borrower. On files like these, the strongest structures usually pair a documented track record with a clean scope of work and a clear exit. A borrower with two completed flips and a tight budget often gets a better outcome than one with a big credit score and no project history.
Four things move your down payment more than anything else:
1. Experience: completed projects unlock the higher cost tiers.
2. The spread: the gap between total cost and after-repair value decides whether the 75% cap bites.
3. The property: one-to-four-unit residential fits the program. Commercial, industrial, land, lots, hospitality, and owner-occupied property are not offered.
4. The exit: a believable sale or refinance plan matters to the lender as much as the equity does.
Loan size also plays in. Loans go up to $5,000,000, with larger by exception, and smaller balances vary by lender.
Plan the Down Payment and the Exit Together
Hard money runs 6 to 18 months, interest-only, with no prepayment penalty. There are no multi-year options. So the cash you tie up has to come back within that window.
That exit shapes how much to put down. A sale exit leans on the after-repair spread. A refinance exit leans on whether the stabilized property can carry long-term financing. Many investors refinance out of hard money into a long-term DSCR loan once the property is stabilized, and Lendmire brokers that path. The 30-year fixed is the spine of those programs.
DSCR is the ratio of a property’s rent to its full monthly obligation. On the long-term side, most purchase files land at 75% to 80% LTV on an investment property, with 85% available at select high-leverage programs for borrowers around 700 or better. Cash-out refinances top out around 75% LTV on standard rentals. Coverage of 1.00 is where select programs start, and stronger ratios open better terms. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
That matters now, because cash you leave trapped in a flip is cash you may need at the refinance. Lenders refinancing a stabilized rental want both enough equity and enough rental coverage. For the full picture, see Lendmire’s complete DSCR loans guide.
A larger down payment on the bridge does not erase the long-term caps. Leverage limits, credit floors, reserve rules, and property eligibility all apply again at the refinance.
Key Terms Defined
Loan-to-cost (LTC): the loan amount as a share of your purchase price plus rehab budget.
Loan-to-value (LTV): the loan amount as a share of what the property is worth.
After-repair value (ARV): the estimated worth of the property once the planned work is finished.
Draw: a payment from the lender that reimburses completed rehab work.
Cross-collateral: additional property pledged to the lender to reduce the cash you must bring.
Exit strategy: how you repay the loan, usually a sale or a refinance into long-term financing.
Bridge loan: a short-term loan that carries a property between two financing events, often funded with hard money.
Frequently Asked Questions
Do I need a down payment on a hard money bridge loan if the property is cheap?
Yes. Lenders generally treat the contract price as the value, so a bargain price does not shrink your share. The loan is sized as a percentage of cost or value, and you cover the remainder. On a bridge purchase without rehab, that typically means at least 20% on your side, varying by lender, property, and experience.
Does experience lower the down payment?
Yes. Tiers are tied to documented completed projects. On fix-and-flips, 85% of project cost applies with fewer than 2 projects, 90% at 2 or more, and 93% at 5 or more. The 75% after-repair cap still applies to all of them. Treat these as typical ranges, not guarantees.
Can I use equity in another property instead of cash?
Some lenders will consider it, which is called cross-collateralizing. The pledged equity is the other property’s value minus its debt, and lenders usually want a cushion left. Expect extra valuations and a lien on the second property. It saves cash but puts that property at risk if the deal fails.
If 100% of rehab is financed, do I bring any cash?
Yes. The 100% covers the rehab budget, paid out in draws after work is completed. You still cover your share of the purchase, closing costs, fees, and the first stretch of work before reimbursement. Plan your cash around total cash to close, not the headline percentage.
What credit score do I need?
The network minimum is 620, with additional conditions below 660. Underwriting stays asset-based, so the property, plan, and exit carry most of the weight. First-time investors qualify at the lower leverage tiers, and every file is reviewed individually.
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. Lendmire is a broker arranging financing through select lenders in its wholesale network, across 41 markets including Washington, D.C. Reach the team at 828-256-2183.
About Lendmire
Lendmire (NMLS# 2371349) is a DSCR-focused mortgage broker that helps arrange investor financing across 41 markets, including Washington, D.C., through wholesale and investor-lending channels. DSCR eligibility is generally reviewed by the lender around the property’s rental income rather than personal income documentation, subject to lender guidelines — which works for self-employed investors, LLC operators, and portfolios above four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 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. CFPB-hosted TILA examination procedures
2. 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: Do You Need Cash to Close a Hard Money Flip Loan? · Can a Self-Employed Borrower Qualify for a Hard Money Bridge Loan? · Can You Get a Hard Money Bridge Loan as an Out-of-State Investor?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.