The Quick Read: Hard money flip approval turns on the deal first and the borrower second: a lender sizes the loan against your purchase, your rehab budget, and the after-repair value, then checks your credit, experience, cash, and exit plan to set leverage tiers. Every figure below varies by lender, property, and experience, and none of it is a commitment to lend.
- Leverage is tiered by completed projects: up to 93% of project cost at 5+ projects, 90% at 2+, and 85% with fewer than 2.
- Every tier is capped at 75% of after-repair value, so the lower of the two tests sets your loan.
- A 620 credit score is the minimum, with extra conditions below 660. First-time investors qualify at the lower tiers.
- The property must be non-owner-occupied, and the rehab money is released in draws, not at closing.
- Your budget, scope of work, and written exit plan matter as much as your credit. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
How Do Lenders Evaluate a Single-Family Flip?
Lenders look at three things in order: the house, the plan, and then you. The loan is secured by the property, so Scotsman Guide’s practitioner tutorial notes that lenders stay conservative on leverage against both the as-is value and the after-repair value.
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 is the order a file usually moves through.
1. The property. Is it an eligible single-family home, and do the comps support both the purchase price and the resale price?
2. The plan. Does the itemized budget match the scope, and does the scope match the value you are projecting?
3. The borrower. Credit, completed projects, cash to close, and cash left over for carrying costs.
4. The exit. Will you sell or refinance before the term ends, and does the paperwork show how?
Hard money is not the same as a full fix-and-flip program. Scotsman Guide’s comparison of the two products explains that a true hard money loan is almost entirely about the asset. A fix-and-flip loan looks at the asset and the borrower, and recent late payments, judgments, foreclosures, or bankruptcies make approval less likely. The article is a few years old, so use it for the concept, not for current numbers.
Most files placed through the wholesale network Lendmire works with behave like the second type. The property leads, but your profile still sets the tier.
Key Terms Defined
After-repair value (ARV): the lender-tested estimate of what the house is worth once the work is finished.
As-is value: what the house is worth today, before any repairs.
Loan-to-cost (LTC): the loan divided by purchase price plus rehab budget.
Loan-to-ARV: the total loan divided by the after-repair value.
Draw: a release of rehab funds after you request it and the work is verified.
Holdback: rehab money the lender keeps in reserve until work is complete.
Scope of work: the written, line-by-line description of every repair and its cost.
Exit: how you repay the loan, by selling the house or refinancing it.
What Property Requirements Apply?
The house must be non-owner-occupied residential property. Hard money flip loans are business-purpose loans for investors, so they are reviewed differently from an owner-occupied mortgage. If you plan to live in the home, this is the wrong product.
On the network’s hard money sheet, collateral covers 1-4 unit residential property, and ground-up construction can go to 10 units. Commercial, industrial, land or lots, hospitality, and owner-occupied properties are not offered. A single-family flip sits in the simplest category.
Single-family specifics matter more than the category.
- Comps carry the file. Pick recent sales of similar homes in the same neighborhood. A flip priced against the best sale on the street invites a low appraisal.
- Resale depth matters. A lender wants to see that homes like yours actually sell in that area.
- Scope must fit the area. A luxury-level rehab on a modest block will not support the ARV you hope for.
- Condition must be assessable. Photos and the contractor’s walk-through should show what the repairs involve.
Hard money is offered across 41 markets, including Washington, D.C. Louisiana, Minnesota, North Dakota, South Dakota, Baltimore, Chicago, and Detroit are not available.
Which Borrower Requirements Set Your Leverage?
Your credit, completed projects, and cash decide how much the lender advances, not whether the house gets looked at. Across the network, experience sorts borrowers into tiers. Each tier has its own advance against project cost.
| Completed projects | Advance against project cost | ARV cap |
|---|---|---|
| 5 or more | Up to 93% | 75% |
| 2 or more | Up to 90% | 75% |
| Fewer than 2 | Up to 85% | 75% |
Up to 100% of the rehab budget can fund in draws against completed work. That is a rehab figure, not a purchase loan-to-value. There is no true 100% purchase program, and a first-timer should plan to bring real cash to closing. The top tier is reserved for experienced investors.
Other lanes exist. A bridge purchase with no rehab runs up to 80% of purchase price. A cash-out or rate-and-term refinance runs up to 65% of value. Loan sizes go up to $5,000,000, larger by exception, and smaller balances vary by lender.
On credit, 620 is the minimum score, with added conditions below 660. Underwriting stays asset-based, so the lender studies the property, the plan, and the exit. Qualification is subject to lender guidelines, and a missed payment or recent judgment can still sink a file.
One more point on experience. A first-timer is not locked out. Experience usually moves leverage and cost, not eligibility, and first-time investors qualify at the lowest tier. Some lenders in the network also limit first-timers from acting as their own general contractor, except on light cosmetic work.
Quick-Reference Requirements Table
| Requirement | What the lender checks | How to prepare |
|---|---|---|
| Credit | Score and recent derogatory events | Pull your report early and resolve errors |
| Experience | Completed projects for the tier | Document each past flip |
| Cash | Gap between cost and loan, plus carry | Show proof of funds beyond closing needs |
| Property | Eligibility, condition, resale depth | Choose a non-owner-occupied 1-4 unit home |
| ARV | Comps and the scope behind them | Use recent, similar, nearby sales |
| Budget | Itemized costs and contingency | Get contractor line items in writing |
| Entity | Documents if closing in an LLC | Have formation papers ready |
| Exit | Sale or refinance plan | Write it down before applying |
If you close in an LLC, that is subject to program terms, so confirm the vesting structure before you sign a contract.
How Do You Build a Lender-Ready Budget and Scope?
Treat the budget as a document the lender will read line by line. It should name every repair, a cost for each, who does the work, and how long it takes. Then add a contingency line, because rehab surprises are common.
The scope matters twice. It drives your cost, and it drives the appraisal. The Scotsman Guide tutorial shows what happens without it: an appraiser who does not know the remodel plan may return an as-is value of $200,000 and an ARV of $210,000. That leaves almost no flip margin.
The practical fix is simple. Finalize the budget and scope with your contractor before the appraisal is ordered, then attach the scope to the appraisal request. An appraiser who sees the plan can value the finished product.
Binding contractor quotes strengthen the file. So does a timeline that matches the project: a light cosmetic job and a gut rehab should not carry the same schedule. Longer projects tend to draw more conservative leverage.
A Modeled Worked Example
Run the numbers on an illustrative flip. These are modeled assumptions, not market data. Think of the purchase price as 100 units and measure everything against it.
- Purchase price: 100 units.
- Rehab budget: 25 units.
- Total project cost: 125 units.
- Projected ARV: 170 units.
- Borrower tier: fewer than 2 completed projects.
Start with the cost test. At the 85% tier, the loan equals 85% of 125 units, or 106.25 units. Now the ARV test. The 75% cap on 170 units is 127.5 units. The cost test is lower, so it sets the loan. The leftover 18.75 units is your cash in the deal, before closing costs and carry reserves.
Now stress the exit. Take 10% off the ARV and you land at 153 units, still above the 125-unit cost, but the spread shrinks before you pay selling costs and interest. If a 10% miss turns your profit into a loss, the deal is too thin.
Notice the shape of the funding, too. The rehab money is not handed over at closing. It is held and released in draws as work is completed.
Where Do Weak Spots Show Up, and What Fixes Them?
| Weak spot | Why it matters | What helps |
|---|---|---|
| Credit near 620 | Extra conditions apply below 660 | Pay down balances, fix reporting errors |
| Thin cash | The gap between cost and loan is yours | Reduce rehab scope or find a cheaper house |
| Few completed projects | Lower tier, less leverage | Start smaller, document every project |
| Aggressive ARV | Appraisal comes in low | Rebuild comps with closer, similar sales |
| Vague scope | Value and budget get questioned | Get itemized contractor quotes |
Cash is a common wall. Many investors compare the loan amount and forget carry costs, closing costs, and a cushion for delays. Plan for a longer hold than you expect.
What Happens After Approval?
Requirements continue after closing. You submit a draw request with documentation, the lender verifies the work, in person or virtually, and funds are released. Keep the project on schedule and keep receipts organized.
Terms run 6-18 months, interest-only, with no prepayment penalty. That means the sale or refinance has to land before maturity. Build extra hold time into your plan.
Many investors who decide to keep the house refinance out of hard money into long-term rental financing once the property is stabilized, and Lendmire brokers that path. That exit is sized differently. A flip loan sizes off the deal and the ARV, while a DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. The complete DSCR loans guide explains how that works. If you might hold, plan the rehab so the finished rent and value support that refinance.
Is Hard Money Right for This Deal?
Use it when the spread is wide, the scope is clear, and the exit is realistic. Skip it if the margin disappears under a 10% ARV haircut, if you cannot cover the cash gap, or if you intend to live in the house.
Cost matters too, and the total is more than the interest line. Add closing costs, the cash gap between cost and loan, and carrying costs for every extra month of hold. Lendmire’s piece Is a Hard Money Fix-and-Flip Loan Worth It on a Single-Family Home? walks through that tradeoff in more depth.
The honest read: the strongest files clear every test. The house comps well, the budget holds up, the borrower has cash, and the exit is written down.
Frequently Asked Questions
Can a first-time flipper qualify?
Yes, at the lower leverage tier. First-time investors qualify at up to 85% of project cost, capped at 75% of ARV, subject to the 620 credit minimum and lender guidelines. Expect to bring meaningful cash, and expect the lender to scrutinize your budget and scope closely.
Is credit the deciding factor?
Credit is one factor, not the only gate. The loan is asset-based, so the property, plan, and exit carry heavy weight. Still, a 620 score is the minimum, extra conditions apply below 660, and recent late payments, judgments, or foreclosures can hurt approval.
Can I use hard money for a house I will live in?
No. These are business-purpose loans on non-owner-occupied property. If you plan to occupy the home, you need a different type of financing.
What if the appraisal comes in low?
A low ARV lowers the loan, because the 75% ARV cap can become the binding test. Share the scope of work with the appraiser up front to prevent an as-is and ARV that sit too close together. If the number still falls short, you cover the gap or renegotiate the deal.
How much cash do I really need?
You need the gap between total project cost and the loan, plus closing costs and carry reserves. At the 85% tier, that gap is 15% of project cost before those extras. Rehab draws do not reduce the cash you bring at closing.
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. Call 828-256-2183 or request a quote at Lendmire.
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.
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References
1. Scotsman Guide: Take a Tutorial on Hard Money Loans
2. Scotsman Guide: Stop the Confusion for Investor Clients
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 Bridge Loan Amount Limits for Single Family Homes · How to Replace Seller Financing With a Hard Money Loan on a First Flip · How to Get Rehab Draws Released on a Hard Money Loan
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.