Fix-and-Flip Down Payment Funding

Fix-and-flip down payment funding is the personal check a short-term file still needs after hard money is approved. Jaken Finance Group originates the fix-and-flip or hard money loan on the house — typically up to 90% LTC, 8.99%–13.5% interest-only, 7–10 business days on a complete file. The remaining equity, points, and interest reserve are your problem. When that gap is $50,000–$500,000, an unsecured business-purpose term loan can fill it in 3–10 business days. Terms are 3, 5, or 7 years. Pricing is quoted per file in an approximate 6%–18% band.

A renovation draw advance is the same product used a different way: cash you float so the contractor starts before the first hard-money rehab draw. The property lender still inspects and reimburses. You still owe the unsecured installment until sale or refinance pays it off.

The educational test is not “can I close.” It is does the sale still leave a profit after both notes. If the answer is no, do not borrow the down payment.

Pre-qualify for flip down payment or draw-advance funding →

Parent product: unsecured term loans. Broader equity-gap guide: real estate down payment funding. Short-term spoke: down payment funding for short-term loans. Long-term DSCR equity: DSCR down payment funding.

Why flippers run out of cash on approved files

Hard money underwrites the asset. It does not put cash in your checking account for the 10% LTC gap. Four common bottlenecks:

• LTC is not 100%. A $370,000 project at 88% LTC still needs $44,400 of equity before points. 100% financing exists for elite files; most first and second flips do not get it.
• Draws lag the GC. Week-one demolition is not a reimbursable draw. Crews will not wait three weeks for an inspector.
• Two projects overlap. Property one is listed; property two is under contract. Sale proceeds are not in hand.
• Reserves were spent on earnest money. EMD funding can cover the deposit. It does not cover the equity check at closing.

None of those is a reason to lever a thin flip. If ARV minus selling costs minus both payoffs is a rounding error, borrowing the down payment just finances a loss.

Property debt vs the personal note

Layer	Who underwrites it	What it covers	Rate / structure
Hard money / fix-and-flip	Jaken Finance Group (property)	Purchase + rehab holdback	8.99%–13.5% interest-only
Down payment / draw advance	Unsecured financing form	Equity gap and/or cash ahead of draws	Approx. 6%–18%, 3/5/7-year amortizing
Gap funding	Jaken Finance Group (2nd lien)	Property-side second	Separate product — gap lending

CFPB Ability-to-Repay describes owner-occupied mortgage credit. A flip is business-purpose property debt. The unsecured note is also business-purpose. A house you will live in is the wrong file for both.

The FTC has published staff notes on small-business financing. Read them before you stack this note on top of a merchant cash advance you already cannot service.

Model the exit before you apply

Load a $275,000 purchase, $95,000 rehab, $465,000 ARV, 88% LTC, 8-month hold at 11.5% interest-only, and 8% selling costs. The hard-money loan is about $325,600, below the $348,750 limit at 75% ARV. The equity gap is $44,400. The default $45,000 down-payment note plus $25,000 draw advance totals $70,000. At an illustrative 12% over 5 years you pay the installment through the hold, then repay the remaining principal at sale.

The calculator uses the lower of the requested LTC, 75% of ARV and the published $10 million loan ceiling. Above $2.5 million, leverage requires an individual quote; the selected LTC remains an illustration. A larger project is not automatically a 100% LTC file. All results remain subject to underwriting.

Project-only math without the unsecured layer: fix and flip calculator. Offer ceiling: 70% rule / MAO calculator. Tool-only unsecured payment: unsecured term loan calculator.

Worked example: Cleveland bungalow that still profits

Purchase $275,000. Rehab $95,000. ARV $465,000. Hard money at 88% LTC / 11.5% IO for 8 months. Selling costs 8%. Unsecured $45,000 down plus $25,000 draw advance at 12% over 5 years.

• The model pays $24,963 of hard-money interest during the hold. The sale therefore repays the $325,600 principal without charging that interest twice.
• Eight unsecured payments total $12,457: about $5,355 interest and $7,102 principal. The remaining unsecured payoff is $62,898.
• Net sale proceeds after the modeled selling costs and both principal payoffs are $39,302. All planned project draws and reimbursements leave $25,600 of remaining cash after the purchase and rehab. That cash includes temporary draw funding and is not income.
• Deduct the $37,420 of cash paid during the hold from those two cash balances to get $27,482 of project profit before omitted costs. The model excludes points, purchase closing costs, taxes, insurance, utilities, draw fees and overruns. It assumes the full hard-money loan accrues interest throughout the hold and all planned reimbursements arrive by sale.

This is complete-project accounting, not a week-by-week cash plan. Delayed reimbursements can require more temporary cash even when the final profit is positive. Judge both the full project profit and the cash needed to close the sale.

Cleveland bungalows with a kitchen/bath scope and a documented buyer pool are the kind of file this page is for. A wholesale assignment with no rehab and a $12,000 spread is not.

Worked example: Atlanta heavy rehab that should not borrow the gap

Purchase $210,000. Rehab $180,000. ARV $445,000. That is a $390,000 total project against a $445,000 exit before selling costs. At 8% cost of sale you net $409,400. Requested hard money at 90% LTC is $351,000, but 75% of ARV limits the model to $333,750. The equity gap is $56,250 before fees. Eight months of hard-money interest at 11.5% costs $25,588, putting the project below break-even even before unsecured interest and the other omitted costs.

Do not take the unsecured note. Either cut basis, cut scope, wait for a fatter ARV, or pass. Borrowing the down payment does not fix a 70% rule miss. Run the MAO calculator before you bid.

Down payment vs renovation draw advance

Use	When it shows up	What to model
Down payment / equity check	Closing table	LTC gap + points + prepaid interest reserve
Renovation draw advance	Week one of rehab	GC deposit, dumpsters, first payroll before inspection
Both	Overlapping projects	Combined amount must stay inside $50,000–$500,000

A draw advance is not a substitute for a poorly structured rehab holdback. If the hard-money lender will not fund rehab at all, that is a property-file problem. Unsecured cash can bridge timing. It cannot replace a lender who does not believe the scope.

Fix-and-flip down payment vs other equity tools

If you already own an eligible rental, compare the HELOC fix-and-flip down payment guide and calculator. It models sale proceeds after the property loan and rental-secured line. The purchase lender must accept the borrowed funds. For work bills awaiting a lender draw, use the separate HELOC reimbursement timing guide.

Need	Better first call
Personal LTC gap or draw timing on a flip	This page
30-year rental, not a 6–18 month hold	DSCR down payment funding
Mixed-use or 5+ unit commercial	Commercial property down payment funding
Second lien on the same property	Gap lending
Earnest money only	EMD funding
Elite file that can take 100% LTC	100% financing
You already own the rental and want cash-out	Second-position DSCR

What the application asks

Expect two years of personal tax returns, a FICO 8 report, identity, entity documents, and a use-of-funds statement that says investment-property equity or rehab float. There is no published FICO floor on the unsecured file. The property file still needs a supportable ARV, a scope, and an exit. Address-level underwriting stays on the fix-and-flip submission.

Risks that show up after closing

• Two clocks. Hard money is often 6–18 months. The unsecured note may be 5 years. If the house does not sell, you still make the personal payment.
• Draw advances are not free float. Every month the GC is slow, you pay both IO and the unsecured installment.
• Rate is quoted per file. Do not lock a spreadsheet at 6% because 6% is the bottom of the illustration band.
• Owner-occupancy kills the stack. If you move in, you have the wrong hard-money disclosure and the wrong unsecured use of funds.

How to apply

1. Run the calculator until net profit after both payoffs is a number that survives one extra month and a 10% rehab overrun.
2. Submit the flip or pick a loan type for the property with Jaken Finance Group.
3. Submit the unsecured financing form for the equity check and/or draw advance.
4. Keep the two closing tables separate so the hard-money desk is not asked to swallow a personal installment as if it were LTC.

Pre-qualify for fix-and-flip down payment funding · Fix and flip loans · (833) 264-7776

Sources

• CFPB — Ability-to-Repay and Qualified Mortgage standards
• FTC — small business financing staff perspective

Hard-money terms stay on the property file. Unsecured down-payment and draw-advance pricing is quoted per file. Sale-proceed math in the calculator is an estimate — confirm ARV, selling costs, and remaining balances before you bind.