The Quick Read: Your maximum comes from whichever test is lowest: a percentage of total project cost, a hard cap at 75% of after-repair value (ARV), and a program dollar limit of up to $5,000,000, larger by exception. Your leverage tier typically follows your completed projects, not your home state. ARV is what the finished property should be worth after the renovation, based on comparable sales. Where you live changes the logistics of the deal far more than it changes the sizing formula.
- Flip leverage across the network runs 85%, 90% or 93% of project cost, depending on completed projects, and every tier is capped at 75% of ARV.
- Up to 100% of the rehab budget funds in draws against completed work. That is a rehab figure, not a purchase loan-to-value.
- There is no true 100% purchase program. The top tier is reserved for experienced investors.
- Out-of-state status mostly affects lender footprint, draw logistics and how your local team is viewed.
- Everything here varies by lender, property, and experience, and none of it is a commitment to lend.
What Actually Sets the Maximum?
The maximum is the smallest result from several tests, not one fixed percentage. A hard money fix and flip loan is short-term, asset-based financing for buying and renovating a non-owner-occupied property, meant to be sold or refinanced. The lender sizes it against cost and against the finished value, then takes the lower answer.
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.
Across the wholesale network we place files with, the structure is tiered by documented completed projects. It runs 93% of project cost at five or more completed projects, 90% of project cost at two or more, and 85% with fewer than two. Every tier is capped at 75% of ARV. Project cost means purchase price plus the rehab budget.
Here is the full picture. Terms and limits vary by lender, property, and experience.
| Loan type | Typical ceiling | Other cap |
|---|---|---|
| Flip, 5+ completed projects | 93% of project cost | 75% of ARV |
| Flip, 2+ completed projects | 90% of project cost | 75% of ARV |
| Flip, fewer than 2 projects | 85% of project cost | 75% of ARV |
| Bridge purchase, no rehab | Up to 80% of purchase price | Property value |
| Cash-out or rate/term refinance | Up to 65% of value | Property value |
| Ground-up, 3+ completed projects | 90% of cost | 75% of completed value |
On the dollar side, loans run up to $5,000,000, with larger amounts by exception. Smaller balances vary by lender. Terms are 6 to 18 months, interest-only, with no prepayment penalty. Credit starts at a 620 minimum score, with additional conditions below 660, and first-time investors qualify at the lower leverage tiers. Underwriting stays asset-based: the property, the plan and the exit.
How Underwriting Sizes the Loan, Step by Step
Underwriters work three inputs through a short sequence, and the ARV cap usually has the last word. Knowing the sequence lets you predict your own number before you submit a file.
1. Gather the inputs. These are the purchase price, a documented rehab budget and a projected ARV. The ARV comes from sales of renovated comparable homes, and the lender typically orders its own valuation.
2. Run the cost test. Multiply purchase price plus rehab budget by your tier percentage: 85%, 90% or 93% of project cost.
3. Run the ARV test. Multiply the ARV by 75%. That is the ceiling no matter how experienced you are.
4. Take the lower result. If the cost test gives a bigger number than the ARV test, the ARV test wins. You cover the difference.
5. Split the loan. The initial advance covers the purchase and closing. The rehab money sits in a holdback and is released in draws after inspected work. Up to 100% of the rehab budget can fund this way.
6. Check the borrower. Credit, liquidity and track record place you in a tier. Experience mostly shifts leverage and terms rather than flipping a yes into a no, though it depends on the lender.
Thin deals break at step four. A project with a high purchase price and a heavy rehab can look fine at 90% of cost and still run into the 75% ceiling.
Two Worked Examples (in Percentages)
Run the numbers by expressing everything as a share of ARV. These are modeled assumptions, not market data, and they skip fees and interest.
Example one: the cost test controls. Say purchase plus rehab equals 70% of ARV, and you sit in the 90% tier. The cost test gives 63% of ARV. That is under the 75% cap, so the cost test sets the loan. Your cash in the deal is the other 10% of project cost, plus fees.
Example two: the ARV cap controls. Say purchase plus rehab equals 90% of ARV. At the 90% tier, the cost test lands above the 75%-of-ARV ceiling, so the ceiling sets the loan at 75% of ARV. You fund the portion of project cost that the loan does not cover, plus fees and reserves.
Same investor, same tier. Different outcomes, because the deal’s margin sets which test bites. That is also why “I qualify for 90%” and “I get 90% of what I’m spending” are two different statements.
Does Being Out-of-State Change the Number?
Not by itself. The sizing formula runs on project cost, ARV and your completed projects. Your mailing address is not a line in it. What changes is everything around the formula.
Think of it as three practical frictions:
- Lender footprint. The network covers 41 markets, including Washington, D.C., and a few states and cities sit outside it. Confirm your property’s location before you go under contract, not after.
- Draw logistics. Draws reimburse completed, inspected work. A remote investor usually pays contractors first and gets reimbursed after verification. Lien waivers and a trusted local representative keep draws moving. Plan for that float in your cash.
- Team credibility. A lender looks at who is actually running the project. An unproven contractor and no local eyes on the job can make a lender treat you as lower-experience, which affects your tier and terms.
One practical point on proving ARV from a distance. Pull renovated comps that sold recently and sit close to the subject. Lock the scope into a line-item budget before you submit. A lender sizing off your numbers wants documents it can trace, not enthusiasm.
Where the General Rule Breaks
The formula holds on most files, and these are the places it bends.
100% rehab funding still lives under the ARV cap. Up to 100% of the rehab budget funds in draws, but that rehab money counts toward the 75% ARV ceiling. If total cost is too high relative to ARV, you fund the gap. People who read that line as no money down get surprised at the closing table.
Refinances are sized more conservatively. Cash-out and rate/term refinances run up to 65% of value, well below flip leverage. Value matters more there because there is no purchase contract anchoring the price.
Bridge purchases without rehab get their own test. With no renovation, there is no rehab holdback. The ceiling is up to 80% of purchase price.
Ground-up construction runs on a separate scale. Leverage reaches 90% of cost and 75% of completed value, and the top tier needs three or more completed projects. Construction can reach 10 units. Flips are limited to 1-4 unit residential.
Recent price run-ups can shrink the cost test. If the seller bought recently at a much lower price, or a wholesale fee is baked into the contract, a lender may weigh as-is value as well as your contract price.
Property types are a hard line, not a haircut. Owner-occupied, commercial, industrial, land or lots, and hospitality properties are not offered.
Exit matters. The loan is a 6 to 18 month interest-only note, so there is no multi-year option. If you plan to rent after the rehab, many investors refinance out of hard money into long-term DSCR financing once the property is stabilized, and Lendmire arranges that path. Clearing a rental coverage test is not the same as positive cash flow, so budget repairs, vacancy and management separately.
Why Is There No Legal Cap?
Because these are business-purpose loans. Credit to buy or improve non-owner-occupied rental or resale property is treated as business-purpose lending. The CFPB’s Truth in Lending summary lists business or commercial credit as exempt from consumer mortgage rules. The Federal Reserve’s supervisory manual adds that documenting how loan proceeds will be used matters.
So the maximum is a credit-policy decision, not a statutory limit. Keep your use-of-proceeds paperwork clean and consistent with a non-owner-occupied investment plan. Honestly, that is the whole regulatory story for your purposes.
What Cash You Still Need at Closing
Plan for the gap above the loan, plus costs the loan never covers. Even in a case where the loan matches project cost, you are not walking in empty-handed.
- The difference between project cost and the loan, when the ARV cap binds.
- Fees and closing costs, which differ by lender.
- Reserves. Lenders want liquid funds beyond your down payment and closing costs, and reserve requirements vary a lot.
- The draw float, meaning the contractor payments you front before reimbursement.
- A cushion for overruns. Thin deals get hurt most. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Market color helps here. ATTOM reports typical gross flip ROI of 25.4% in its latest quarterly report, which leaves limited room for overruns at full leverage. Per ATTOM’s state-level data, 38.9% of flipped homes were bought with financing, so cash buyers are your bidding competition.
Across comparable files, the deals that stay healthy are the ones where the investor sized the loan at the lower test, then sized the cash on top of it. Borrow to the cap on paper, but keep real liquidity above it.
Key Terms Defined
After-repair value (ARV): the estimated value of the property once renovations are finished, based on recent sales of comparable renovated homes.
Loan-to-cost (LTC): the loan amount divided by total project cost, meaning purchase price plus rehab budget.
Rehab holdback: the part of the loan held back until work is done, then released in draws.
Draw: a payment released from the holdback after an inspector confirms the work was completed.
Business-purpose loan: a loan used for an investment or business activity, not for a home you live in.
Reserves: liquid cash you hold after closing to show you can carry the project.
Cost test and ARV test: the two sizing checks. The lender takes whichever gives the smaller loan.
What the Decision Looks Like in Practice
Start from the ARV, work backward, and see what the cap leaves you. Take your ARV, multiply by 75%, and compare that to your project cost. If cost times your tier percentage is lower, you are in cost-test territory. If it is higher, you are cap-bound and need cash for the difference.
When the deal exceeds the ceiling, you have four honest options: renegotiate the price, trim the scope, bring more cash, or pass. Gap loans and cross-collateral can stretch effective leverage, but they add a second obligation and more cost.
Now the appraisal shortfall. Say your estimated ARV turns out 10% too high. Take a deal where project cost is 85% of your original ARV estimate and you sit in the 90% tier. At the original ARV, the cost test lands just above the 75% ceiling, so the cap already binds and your gap is 10 points. If the true ARV is 10% lower, the cap drops to 67.5% of the original figure. Your cash need rises to 17.5 points. Same property, same plan, a much bigger check. Stress your ARV before you rely on it.
Tax treatment varies; consult a qualified professional.
Frequently Asked Questions
What is the maximum hard money fix and flip loan amount?
Program dollar limits run up to $5,000,000, larger by exception, with smaller balances varying by lender. Most deals never reach that ceiling. They hit the 75% of ARV cap or the tier percentage of project cost first. Your experience tier, credit and property determine where you land.
Does being out-of-state lower my loan amount?
Not as a formula adjustment. Leverage tiers follow completed projects, not residency. What changes is whether the property sits inside the lender’s footprint, how draws are managed remotely, and how a lender views a thin or unproven local team. Terms vary by lender, property and experience.
Can I get 100% financing on a flip?
There is no true 100% purchase program. Up to 100% of the rehab budget can fund in draws as work is completed, but that sits inside the 75% ARV cap and the tier percentage of project cost. Expect to fund a gap, plus fees and reserves.
Can a first-time flipper get funded?
First-time investors qualify at the lower leverage tiers, which is 85% of project cost with fewer than two completed projects, subject to the 75% ARV cap and a 620 minimum score with added conditions below 660.
How long can I keep the loan?
Terms run 6 to 18 months, interest-only, with no prepayment penalty. There are no multi-year options. Investors who need longer runway typically refinance into long-term rental financing once the property is stabilized.
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. The call is 828-256-2183. Run your ARV and cost numbers through the sizing test above first, because the lower of the two tests will set your check long before any headline limit does.
About Lendmire
Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income rather than personal income, subject to lender and program guidelines, a fit for self-employed investors and LLC-owned portfolios. Lendmire was recognized as a Scotsman Guide Top Mortgage Workplace in 2025 and 2026.
Short-term financing tends to work best when the long-term plan is decided early – see the hard money loan overview.
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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 Truth in Lending summary
2. Federal Reserve Supervisory Manual, Reg Z
3. ATTOM
4. ATTOM Home Flipping Trends by State
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Out-of-State Investor Hard Money Loan Requirements · Hard Money Lender Questions and Documents for a Fix and Flip Loan · Can You Borrow Enough on a Hard Money Loan to Flip a Condo?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.