The Quick Read: The down payment is whatever remains after the lender applies its leverage caps to your deal, so you shrink it by moving the caps, the cost, or the value in your favor. Across Lendmire’s wholesale network, fix-and-flip leverage is tiered by documented completed projects, and each tier is capped by after-repair value. Every figure here varies by lender, property, and experience, and none of it is a commitment to lend.
- Fix-and-flip leverage runs 85% of project cost with fewer than two completed projects, 90% with two or more, and 93% with five or more, all capped at 75% of after-repair value.
- Up to 100% of the rehab budget can fund in draws against completed work.
- Bridge purchases without rehab reach up to 80% of purchase price. Cash-out and rate-and-term refinances reach up to 65% of value.
- There is no true 100% purchase program. “No money down” still leaves closing costs, points, and reserves.
- Experience, a lower contract price, and a documented budget are the three strongest levers.
What Does “Down Payment” Mean in Hard Money?
A hard money down payment is the gap between your total project cost and the loan amount. No regulator or statute sets it. The lender caps the loan, and you cover the rest.
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.
Corporate Finance Institute describes hard money as short-term, property-collateralized lending. Because the property is the main protection for the lender, leverage is capped. Its loan-to-value primer explains the formula: loan divided by asset value.
Keep three terms apart, because they get blurred constantly:
- Down payment is the part of the purchase price the loan does not cover.
- Cash to close is the down payment plus closing costs and points.
- Reserves are liquid funds the lender wants to see after closing.
A deal can have a small down payment and still demand real cash at the table. Plan for all three.
How Do Lenders Size the Loan?
Lenders apply the tightest of several caps. The loan cannot exceed the loan-to-cost limit, and it cannot exceed the share of after-repair value the program allows. Whichever binds first sets your check.
| Cap | What it measures | Where it bites |
|---|---|---|
| Loan-to-cost | Loan ÷ (purchase + rehab) | Most flips |
| Loan-to-ARV | Loan ÷ finished value | Rehab-heavy deals |
| Loan-to-value | Loan ÷ current value | Bridge and refinance |
After-repair value is an appraiser’s opinion built from comparable sales. The Motley Fool’s ARV explainer covers the comps-based method and the 70% rule investors use to screen purchase prices. That rule is a screening shortcut, not a program term.
Lendmire’s network ties the top cost tier to a track record. The strongest leverage we see requires documented completed projects, which is why first-time investors usually land in the lowest tier. Credit matters too: a 620 minimum score applies, with added conditions below 660, and underwriting stays centered on the property, the plan, and the exit.
A Purchase Example With Percentages Only
Run the numbers on a flip bought for $200,000 with a documented rehab budget, and assume the finished value supports the 75% ARV cap comfortably. An investor with two completed projects falls in the 90% loan-to-cost tier. The rehab budget funds in draws, so the cash needed at closing is driven by the purchase side, not the construction side.
Now take the same investor with no completed projects. The tier drops to 85% of cost, so the check grows. Same property, same plan, different experience, different cash. That gap is the clearest argument for building a track record before chasing a thinner down payment.
If the ARV cap binds, the story changes. A deal with weak margins can hit 75% of finished value before it reaches the cost tier, and the borrower covers the shortfall no matter how experienced they are. A high loan-to-cost percentage never guarantees low cash.
Which Levers Actually Shrink the Check?
Five levers do the real work. They differ in who they suit and what they cost you.
| Lever | How it cuts cash | Trade-off |
|---|---|---|
| Buy below ARV | Cap stops binding | Needs deal discipline |
| Rehab in draws | Rehab funded as work completes | Timing gap, draw handling |
| Experience tier | Higher cost percentage | Takes completed projects |
| Lower contract price | Cuts cost and gap | Seller must agree |
| Cross-collateral | Pledges a second property | Risks both properties |
Buy Far Enough Below ARV
If purchase plus rehab sits well under the ARV cap, the cost tier governs and your cash falls. If the total pushes past the cap, you cover the difference. Run the arithmetic before you make the offer, not after.
Use the Draw Structure
Up to 100% of the rehab budget can fund in draws against completed work. That is a rehab-budget figure, never a purchase leverage figure. The practical catch: you often front the cost of each phase and get reimbursed after completion, so you need working capital even when the loan covers the budget on paper. A contractor-backed scope of work supports the draw schedule.
Move Up an Experience Tier
Documented completed projects move you from 85% to 90% to 93% of cost. If your current file sits one project short of a tier, finishing that project before the next purchase may cut the next check more than any negotiation will.
Negotiate Price and Budget
A lower contract price lowers both the cost base and the gap. A tighter, documented rehab budget helps too, since the lender funds what it can verify.
Cross-Collateral, With Care
Pledging a second property can fill the cash gap, and combined leverage across both liens is what lenders examine. Investopedia’s combined loan-to-value entry explains how multiple liens are measured together. Availability and sizing vary by lender and are not a standard feature of every program. And it cuts both ways: you remove the cash down payment but put another asset behind the note.
How Does a Refinance Change the Picture?
On a refinance, your “down payment” is the equity you leave in the property. Lendmire’s network offers cash-out and rate-and-term refinances up to 65% of value, so the equity you keep in is at least 35%. Lowering your net capital in the deal means getting a higher value on a well-documented property, not finding a different program.
Seasoning is the timing rule that shapes that value. Lenders vary in how long you must own before they size on a new appraisal rather than on what you invested. Seasoning is lender policy, not law. Inside the window, lenders often anchor to cost. After it, a fresh appraisal can release more cash.
Payoff growth is the quiet trap. Extensions, accrued interest, and rolled-in draw costs raise the balance you must retire. A larger payoff can push a refinance toward cash-out treatment, or leave a cost-based loan short of the payoff. Check the payoff figure before you assume the numbers hold.
Hard money terms run 6 to 18 months, interest-only, with no prepayment penalty, and no multi-year options exist on the current program. That makes the exit plan part of the down payment decision. Many investors refinance out of hard money into long-term DSCR financing once the property is stabilized, and Lendmire brokers that path. Lendmire’s complete DSCR loans guide explains how that takeout is evaluated on rental income. A DSCR file compares rent to the full monthly obligation. Clearing the ratio is not the same as positive cash flow, since repairs, vacancy, and management sit outside the calculation.
Where the General Rule Breaks
Low appraisals. If the appraiser returns a lower ARV, the 75% cap shrinks your loan and your cash requirement jumps. Hold contingency cash for exactly this.
Delayed financing. Agency delayed financing was built for cash buyers, and it generally requires that purchase money not be secured by the subject property. A hard money lien usually disqualifies it. It is an agency exception, not a path for a DSCR refinance.
First-time investors. They qualify at the lower leverage tiers, so expect a larger check. The top tier is reserved for experienced investors.
Larger or unusual projects. Ground-up construction reaches up to 90% of cost and 75% of completed value at three or more completed projects. Loans go up to $5,000,000, with larger by exception.
Property type. The network covers non-owner-occupied residential of 1 to 4 units, and ground-up construction to 10 units. Commercial, land, and owner-occupied properties are not offered.
Here is the honest tension. Pushing for the thinnest possible down payment feels efficient. But a thin check plus a low appraisal plus a delayed refinance is how a short-term loan matures before the exit is ready. If you must choose between a bigger down payment and a shaky exit, the bigger down payment is usually the safer structure.
Who Should Pull Which Lever First?
The right first move depends on where you sit.
- New investor: Focus on price and budget. You cannot move up a tier yet, so buy below the ARV cap and keep a cash cushion for draws.
- Two or three completed projects: Document each one carefully. The 90% tier is within reach, and the 93% tier opens at five completed projects.
- Experienced operator: You are already near the top tier. The remaining lever is deal quality, which keeps the ARV cap from binding.
Whatever your profile, gather the paperwork early: proof of funds, entity documents, the contractor scope and budget, and a record of completed projects. Underwriting stays asset-based, so the property, the plan, and the exit are the file.
Key Terms Defined
Loan-to-cost (LTC): The loan divided by purchase price plus rehab budget.
After-repair value (ARV): The estimated value of the property once renovations are finished.
Loan-to-value (LTV): The loan divided by the property’s current appraised value.
Seasoning: The time a lender wants you to hold a property before sizing a refinance on appraised value.
Draw: A release of rehab funds after a phase of work is completed.
Cross-collateral: Pledging a second property as additional security for one loan.
Frequently Asked Questions
Can I get a hard money loan with no money down?
Not in the sense of owing nothing. There is no true 100% purchase program in Lendmire’s network. The closest structure is up to 100% of the rehab budget funded in draws, plus a high loan-to-cost tier for experienced investors. Closing costs, points, and reserves remain, and every term varies by lender, property, and experience.
Do first-time investors pay a bigger down payment?
Yes, typically. First-time investors qualify at the lower leverage tier, which sits at 85% of project cost, versus 90% and 93% for investors with more completed projects. Every tier is capped at 75% of after-repair value, and a 620 minimum credit score applies, with added conditions below 660.
What happens if the appraisal comes in low?
Your loan shrinks and your cash requirement rises. The ARV cap is based on the appraiser’s value, so a lower figure reduces what the lender will fund. Hold contingency cash, and consider renegotiating the price if the numbers no longer work.
Does a hard money refinance require a down payment?
Not a down payment, but you leave equity in the property. Cash-out and rate-and-term refinances reach up to 65% of value in this network. Cost-based sizing may apply inside a lender’s seasoning window, and payoff growth from extensions can change the math.
How does a DSCR takeout fit into the plan?
It gives you a long-term exit once the property is rented and stabilized. Many investors refinance out of hard money into DSCR financing, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Tax treatment varies; consult a qualified professional.
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.
The investors who keep their down payments smallest are rarely the ones who negotiate hardest at the closing table. They are the ones who bought well below the ARV cap, finished their last project, and had the exit lined up before the first draw.
About Lendmire
Lendmire is a DSCR-focused mortgage brokerage, NMLS# 2371349, placing investor loans across 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed by the lender around a property’s rental income rather than personal income documentation, which fits LLC-held rentals, self-employed investors, and portfolios scaling past conventional financed-property limits. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Many investors treat hard money as the acquisition tool and plan the exit up front – 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. Corporate Finance Institute: Hard Money Loan
2. Corporate Finance Institute: Loan to Value Ratio
3. The Motley Fool: ARV Formula
4. Investopedia: Combined Loan-to-Value
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 Exit Strategy Requirements for a DSCR Refinance · Can a Two-Project Rehabber Use Gap Funding With Hard Money? · Can You Refinance Out of Hard Money After an Overspent Rehab?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- 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.