Updated Rates as of August 2026
A non-recourse fix and flip loan on a 1–4 unit property limits the lender to the collateral if you default — standard bad-boy carve-outs excepted — instead of a full personal guarantee on every dollar of deficiency. Jaken Finance Group can quote that structure on qualified investor files; it is not automatic on every flip, and leverage is quoted per deal, often below published recourse caps.
This page covers how non-recourse fix-and-flip financing works on single-family homes through fourplexes, what underwriters need before they will quote carve-out protection, and how it differs from self-directed IRA non-recourse (a separate product with no personal guaranty at all).
Submit your fix and flip scenario · Recourse vs non-recourse explainer · (833) 264-7776
What investors mean by “non-recourse” on a flip
On most short-term investor debt, the borrowing LLC signs the note and a managing member also signs a personal guarantee. That is recourse — the lender can look to you personally if the property sale does not cover the balance.
A non-recourse note (with bad-boy carve-outs) changes the risk split:
| Element | Recourse flip (typical) | Non-recourse flip (qualified file) |
|---|---|---|
| Deficiency after foreclosure | Lender may pursue guarantor | Recovery generally limited to the asset |
| Carve-outs | N/A — already full recourse | Fraud, misrep, unauthorized transfer, bankruptcy, environmental |
| Availability | Broad on 1–4 investor files | Quoted per file — not the default |
| Leverage | Up to 100% LTC / 75% ARV on qualified files | Often tighter — quoted per deal |
| Rate band | 8.99%–13.5% IO on published programs | Same published band; pricing quoted per file |
Carve-outs are not cosmetic. They convert the loan to recourse for the guarantor when triggered. Do nothing wrong and the property remains the lender’s primary remedy.
For the full legal framework, see recourse vs non-recourse for investment property.
Published program bands (all flip files)
Whether recourse or non-recourse, Jaken Finance Group’s fix-and-flip band on qualified 1–4 unit non-owner-occupied property aligns with hard money parameters:
- Rate: 8.99%–13.5% interest-only
- Term: 6–12 months typical
- Close: 7–10 business days on complete diligence
- Leverage (qualified files): up to 100% LTC, capped at 75% ARV — fund the lower number
- Credit: collateral-first — no minimum FICO on select programs
A non-recourse quote may land inside those bands on rate but below them on LTC or ARV. Treat published caps as the ceiling on strong recourse-style files, not a promise on every non-recourse term sheet.
What has to be true before underwriting quotes non-recourse
Underwriters do not toggle recourse off because you asked nicely. Common gates on files that receive a carve-out quote:
- Clean exit — contract sale, listed disposition, or documented refi path with realistic timing
- Supported ARV — sold comps within appropriate radius, matching unit count and product type
- Complete scope — line-item budget, not a single “rehab $80K” line
- Entity readiness — LLC operating agreement, EIN, good standing where required
- Liquidity — cash for down payment, closing, carry, and draw gaps the non-recourse structure requires
- Track record — prior flips or parallel assets that show you finish what you start
- No red-flag title — lis pendens, undisclosed liens, or use mismatches kill structure conversations early
Thin first deals can still fund — often with recourse and moderate leverage. Ask for non-recourse in the submission; underwriting will answer candidly.
Rehab draws on a non-recourse flip
Non-recourse structure does not change draw mechanics. The lender still releases rehab dollars against completed work:
| Draw phase | What the lender verifies |
|---|---|
| Initial funding | Purchase (or payoff) at close per term sheet |
| Draw 1–n | Inspection vs scope, lien waivers where required |
| Final / holdback | Punch-list completion before full release |
Model two draws of carry in reserve — inspectors, weather, and change orders routinely push timelines. Use the fix and flip calculator at quoted rate plus 200 bps before you increase scope.
Illustrative example: three-unit value-add (not a quote)
Numbers below are for education only — not an offer.
| Item | Amount |
|---|---|
| Purchase (triplex, one vacant unit) | $420,000 |
| Rehab scope (three kitchens, mechanical) | $95,000 |
| All-in cost | $515,000 |
| ARV from 2–4 unit sold comps | $685,000 |
| Recourse-style ceiling (illustrative) | 75% ARV → $513,750 cap vs 100% LTC → fund lower |
| Non-recourse quote (illustrative) | Might fund $455,000 — entity brings ~$60,000 more equity |
| Rate | 10.25% IO · 9-month term |
| Exit | Sale at $675,000 after lease-stabilized marketing |
The sponsor traded leverage for carve-out protection. Whether that trade makes sense depends on net worth exposure, parallel guarantees on other assets, and margin after carry.
Non-recourse flip vs IRA non-recourse
Do not confuse these:
| Qualified LLC flip (this page) | Self-directed IRA flip | |
|---|---|---|
| Vesting | Borrower LLC | IRA via custodian |
| Personal guaranty | Often none on non-recourse quote | Prohibited — always non-recourse |
| Rehab | Sponsor-managed or contractor | Third-party only |
| Leverage | Quoted per file | Typically lower — see IRA fix and flip |
IRA files belong on the IRA guides, not mixed into a personal LLC submission.
Documents to have ready on a non-recourse flip submission
Speed on a carve-out quote tracks file completeness, not how loudly you ask for non-recourse:
| Document | Why it matters |
|---|---|
| Purchase contract | Price, close date, assignment clause, business-purpose buyer |
| Scope of work | Line-item budget by trade — lenders size draws on this |
| ARV comp pack | Sold 1–4 unit matches within appropriate radius |
| Entity packet | LLC OA, EIN letter, certificate of good standing |
| Liquidity proof | Bank statements covering equity, closing, and IO reserve |
| Insurance quote | Hazard binder with lender mortgagee clause |
| Exit outline | List date target, buyer profile, or refi lender conversation |
Missing scope on a four-unit gut rehab is the most common delay — one kitchen line item is not enough when four units need cabinets.
When a non-recourse flip quote beats full recourse
Not every sponsor needs carve-out protection. Use this filter before you anchor on non-recourse:
| Your situation | Lean toward |
|---|---|
| First or second flip, thin liquidity | Recourse — faster path, higher LTC on qualified files |
| Parallel guarantees on three or more active deals | Non-recourse — limit cross-default exposure |
| High personal net worth outside real estate you want shielded | Non-recourse — if file qualifies |
| Margin under 12% gross after rehab | Fix the deal first — structure will not save math |
| Estate sale with clean title and strong comps | Either — file quality drives the answer |
| Partner will not sign PG but entity has equity | Non-recourse conversation — or restructure equity |
The right answer is often two term sheets on the same address: one recourse at higher LTC, one non-recourse tighter. Compare all-in equity tied up and deficiency exposure, not rate alone.
Draw inspection cadence on non-recourse rehabs
Non-recourse notes still use inspection-based draws. Typical cadence on 1–4 unit flips:
- Close — initial advance for purchase (and sometimes first tranche of rehab per term sheet)
- Draw request — sponsor submits photos, invoices, and lien waivers for completed line items
- Inspection — third-party or lender inspector verifies work matches scope
- Release — wire to entity within agreed window (often 2–5 business days after clear inspection)
- Repeat until holdback released at certificate of occupancy or final punch list
Delays happen when scope changes without a written change order — adding a fourth bathroom mid-project without updating the budget freezes the next draw. On triplex and fourplex files, schedule inspections by building zone (e.g., two units complete before requesting full release on a third) so partial completion still moves cash.
Budget 10–14 days between draw request and cash in account for first-time sponsors; experienced teams with repeat files often compress that window.
Common mistakes when shopping non-recourse
- Assuming LLC = non-recourse — read the guarantee block
- Using Zestimate as ARV — use sold comps your lender will accept
- Under-reserving IO — non-recourse files still pay interest every month
- Ignoring carve-outs — bankruptcy filing or unauthorized deed transfer can pierce protection
- Comparing only rate — all-in cost includes points, fees, and equity tied up
Related programs and guides
- Non-recourse bridge loan — stabilized or light-rehab hold before sale or DSCR
- Non-recourse loans on duplex, triplex, fourplex — small multifamily nuance
- Bridge loans for investors — product overview
- How to finance 2–4 units with hard money — BRRRR and value-add hold
Next step
Send the address, contract, scope, and entity docs. Underwriting will confirm whether a non-recourse fix and flip loan fits — and what leverage comes with it.
Submit your scenario · Loan programs · (833) 264-7776
Rates, leverage, and recourse structure are quoted per file on qualified non-owner-occupied investment property. Jaken Finance Group is a lender, not a legal advisor; review guarantee and carve-out language with counsel before signing.