Investors searching fix and flip loan requirements, hard money loan requirements, and fix and flip loan down payment need a clear approval checklist — this page is the full requirements reference. For maximum leverage and no-money-down structures, see 100% financing.
Jaken Finance Group funds fix and flip nationwide — all 50 states. Rates: 8.99%–13.5% interest-only, close in 7–10 business days.
Compare: fix and flip for beginners · hard money nationwide · luxury vs standard · jumbo hard money · approval process deep dive
Requirements at a glance
| Requirement | Standard | Notes |
|---|---|---|
| Occupancy | Non-owner-occupied only | Business-purpose |
| Property condition | Distressed / value-add | Not turnkey retail |
| ARV support | Documented comps | 3+ recent sales, same product type |
| Rehab scope | Line-item contractor bid | Licensed GC preferred |
| Exit strategy | Sale or refi defined | Timeline 6–12 months |
| Credit | Reviewed — flexible on select programs | Tier affects leverage |
| Liquidity | Closing costs + reserves + earnest | Even at high LTC |
| Experience | Tiered — not always required | Affects max leverage |
The four pillars of fix-and-flip approval
Every lender evaluates the same structural pillars — weighting shifts by sponsor tier:
1. Collateral (ARV and property type)
The property must support the loan after renovation. Lenders cap at 75%–80% of ARV depending on program. Comps must be:
- Sold within 6 months (90 days preferred)
- Same product type (ranch vs ranch, not new construction vs 1940s bungalow)
- Within 1 mile in urban markets; wider in rural
- Adjusted for bed/bath count, GLA, and finish level
ARV guide: demystifying loan-to-value ratio · instant ARV estimate tool
2. Project economics (LTC and margin)
Loan-to-cost measures leverage against total project cost — purchase plus rehab plus soft costs:
| Metric | Formula | Typical cap |
|---|---|---|
| LTC | Loan ÷ total project cost | 80%–90% by tier |
| ARV LTV | Loan ÷ ARV | 75% max |
| Spread | ARV − all-in cost | 15%–20%+ minimum |
Both caps bind simultaneously. A 90% LTC file still fails if the loan exceeds 75% of ARV.
3. Sponsor liquidity
Even at 100% LTC, sponsors need cash for:
| Reserve category | Rule of thumb |
|---|---|
| Closing costs + points | 2%–4% of loan amount |
| Interest carry | 3–6 months IO at quoted rate |
| Rehab contingency | 10% of scope |
| Utilities + insurance | $500–$1,000/month during hold |
Lenders verify with 2–3 months bank statements — all accounts listed on the application.
4. Exit credibility
Document one primary exit and one backup:
| Exit type | Evidence required |
|---|---|
| Retail sale | ARV comps + DOM analysis for submarket |
| DSCR refi | Rent survey + DSCR calculator output |
| Wholesale assignment | Buyer proof-of-funds or assignment contract |
| Bridge carry | Bridge pre-approval if sale delayed |
What gets declined — common rejection reasons
| Red flag | Why lenders pass |
|---|---|
| ARV comps don’t support margin | Weak comp set or stick-built comps on manufactured |
| Rehab scope missing line items | Lump-sum budgets without contractor bid |
| Thin spread | All-in cost too close to ARV — no room for overrun |
| No liquidity for carry | High LTC but zero reserves for interest + utilities |
| Illegal conversion / zoning | Unpermitted ADU or commercial use on SFR |
| Occupied with no eviction plan | Timeline risk on flip exit |
| Environmental | Mold remediation without protocol |
| Active bankruptcy or recent foreclosure | Select programs only — disclose early |
When you do NOT meet fix-and-flip requirements
Hard money requirements exist because the asset must carry the loan if the project stalls:
| Profile | Gap | Path forward |
|---|---|---|
| Owner-occupant buyer | Wrong product entirely | Conventional/FHA |
| Turnkey rental, no rehab | No value-add thesis | DSCR at 5.75%–10.5% |
| ARV margin under 12% | Negative risk-adjusted return | Renegotiate price or walk |
| No entity, personal use intent | Business-purpose violation | Re-structure or different product |
| Unpermitted addition | Title and insurability risk | Legalize or exclude from ARV |
| Rural comp desert | Appraisal unsupported | Higher equity injection |
Investor mortgages on non-owner-occupied property follow different rules than CFPB consumer mortgage disclosures — business-purpose loans are not subject to the same ATR documentation, but lenders still enforce asset-based standards.
Approval timeline — what happens after you submit
| Day | Milestone |
|---|---|
| 1–2 | File intake — contract, scope, comps, bank statements |
| 2–4 | ARV review — lender validates comp support and margin |
| 3–5 | Term sheet — rate, LTC, points, conditions |
| 5–8 | Title + insurance ordered |
| 7–10 | Close — first draw typically at funding |
Draw after close: fix and flip draw process guide
Leverage by experience (summary)
Full leverage tiers and gap-funding structures live on 100% financing — summary only:
| Experience | Typical max LTC | Down payment |
|---|---|---|
| First-time | 80%–85% | 15%–20% |
| 3–5 deals | 90% | ~10% |
| 5+ deals, strong file | Up to 100% LTC | See 100% guide |
No money down configurations: fix and flip no money down explained · 100 LTC program details
Worked example: requirements on a $320K DC rowhouse rehab
| Requirement | File submission | Lender finding |
|---|---|---|
| ARV | 3 sold rowhouses within 0.4 mi | $485K supported |
| Scope | $78K line-item + GC bid | Approved with 10% contingency |
| LTC | $255K cost / $320K loan ask | 79% LTC — approved at 78% |
| Liquidity | $41K in entity account | Covers 5 months carry |
| Exit | MLS resale at $479K | 6-month marketing plan |
| Credit | 702 FICO | Standard tier — no reduction |
Timeline reference: DC row home rehab hard money
ARV and leverage caps
| Metric | Cap |
|---|---|
| ARV ceiling | 75% of after-repair value |
| Rehab funding | 100% of documented scope |
| Loan amount | $75K–$1.5M+ on qualified files |
| Term | 6–12 months |
| Rate | 8.99%–13.5% IO |
LTV/LTC guide: understanding LTV and LTC
Document checklist
| Document | Purpose |
|---|---|
| Purchase contract | Price, timeline, assignment terms |
| Scope of work | Line-item rehab budget |
| Contractor bid(s) | Licensed GC preferred |
| ARV comps | 3+ recent sales — match property type |
| Bank statements | 2–3 months — reserves |
| Entity documents | LLC operating agreement if applicable |
| Insurance quote | Builder’s risk / hazard |
| ID + guarantor info | Personal guarantee typical |
Evaluation checklist: evaluating hard money loan proposals · Scope templates: scope of work templates
Credit policy
Jaken Finance Group uses credit-flexible, asset-based underwriting — not minimum FICO gates like banks.
| FICO band | Typical impact |
|---|---|
| 740+ | Best leverage — first-time may hit 80% LTC |
| 680–739 | Standard tiers |
| 600–679 | Lower leverage — strong ARV required |
| Below 600 | Select programs — 500 credit hard money |
Credit score changes affecting investors: FICO 10T and VantageScore 4 guide
Property types accepted
| Type | Fit |
|---|---|
| SFR | Primary |
| 2–4 unit | Yes |
| Townhouse / condo | Case-by-case — HOA rules |
| Manufactured on land | MH flip program |
| REO / bank-owned | REO financing guide |
| Auction (courthouse/online) | Auction property guide |
Entity and vesting requirements
| Vesting type | Accepted | Notes |
|---|---|---|
| LLC (single or multi-member) | Preferred | Operating agreement required |
| Series LLC | Case-by-case | State-specific |
| Land trust | Case-by-case | Beneficiary disclosure |
| Personal name | Limited | Business-purpose certification required |
Insurance requirements before closing
| Coverage | When bound |
|---|---|
| Builder’s risk / course of construction | Before or at closing |
| Liability | GC certificate naming lender |
| Flood | If FEMA zone requires |
Investor flip guides (blog)
- Benefits of hard money for flipping homes
- Navigating the fix and flip landscape
- Women in real estate investing
- Hard money loan mistakes to avoid
Apply
Submit flip file · Get approved · Fix and flip calculator
Related: rehab loans for investment property · hard money loan application process