Fix and Flip Loan Requirements: What Lenders Actually Review Before They Fund

Fix-and-flip lenders review both the borrower and the deal. Here are the typical requirements across most private and hard money lenders:

Credit score: 660 minimum at most lenders. Scores above 700 unlock better rates and higher leverage. Some lenders work with 620+ for experienced borrowers, but pricing jumps noticeably.

Down payment: 10% to 20% of the purchase price. At 90% LTC, you bring 10% of total project cost. At 80% LTC, you bring 20%. On a $200,000 purchase, that is $20,000 to $40,000 before closing costs.

Cash reserves: 3 to 6 months of loan interest payments in liquid funds after closing. On a $200,000 loan at 11%, that is $5,500 to $11,000 in the bank.

Experience: Not always required, but helpful. Borrowers with 2+ completed flips usually get better terms. First-time investors can qualify when the deal is conservative and reserves are strong.

Property type: Non-owner-occupied residential: single-family, 2-4 unit, condo, townhome. Most lenders do not finance owner-occupied properties or commercial.

Loan range: $100,000 to $5,000,000 at most lenders. Minimum loan amounts exist because the fixed costs of origination make very small loans uneconomical.

The scope of work is one of the most important parts of your loan application. Lenders use it to verify that the renovation plan supports the projected ARV, that the budget is realistic, and that the timeline makes sense.

A strong scope of work includes line-item costs broken out by trade. Example format:

Demo and cleanout: $4,500. Electrical (panel upgrade, new outlets, lighting): $8,200. Plumbing (new fixtures, water heater): $6,800. Kitchen (cabinets, countertops, appliances, backsplash): $14,000. Bathrooms x2 (tile, vanity, fixtures): $9,500. Flooring (LVP throughout, 1,400 sq ft): $7,000. Paint interior and exterior: $5,500. Landscaping and curb appeal: $3,500. Contingency (12%): $7,100. Total: $66,100.

This format tells the lender exactly what you are doing, what it costs, and that you have thought through the full scope. Compare that to "$65K renovation" with no detail. The detailed version gets approved faster and with fewer conditions.

Include contractor bids or at minimum a signed contractor agreement. Lenders want to know you have an actual contractor lined up, not a plan to figure it out after closing.

Your after-repair value estimate must be backed by comparable sales. Lenders typically want 3 to 5 closed comps that meet these criteria:

Location: Within a half mile of the subject property, ideally on similar streets in the same school district.

Recency: Sold within the past 90 days. Comps older than 6 months are generally discounted or rejected.

Condition: Renovated to a similar standard as your planned finish level. A gut-renovated luxury flip is not comparable to a cosmetic refresh.

Size: Within 15% to 20% of your property's square footage, with similar bedroom and bathroom counts.

The lender will order an appraisal, and the appraiser will independently select comps and arrive at a value. If your comps and the appraiser's comps diverge significantly, expect reduced proceeds or a request to renegotiate the purchase price.

Practical tip: pull your comps from the MLS or public records before you submit your application. If you cannot find 3 strong comps that support your ARV, the deal may not underwrite the way you hope.

Having a complete package ready before you apply is the single biggest factor in closing speed. Here is what most lenders require:

Purchase contract: Signed by both parties with the purchase price, closing date, and any contingencies.

Scope of work and budget: Line-item renovation plan with contractor bids or a signed contractor agreement.

Comparable sales: 3 to 5 recent closed sales supporting your ARV estimate, with addresses and sale prices.

Entity documents: If buying through an LLC (which most investors do), provide the operating agreement, articles of organization, and EIN letter. The LLC should be formed in the state where the property is located or registered to do business there.

Photo ID and credit authorization: Government-issued ID and written authorization for the lender to pull credit.

Proof of funds: Bank statements or asset statements showing you have enough cash for the down payment, closing costs, and reserves.

Insurance: A builder's risk or renovation insurance quote. Standard homeowner's insurance does not cover properties under active renovation. Your agent should know the property is an investment being renovated.

Borrowers who submit all of these items upfront can often get a term sheet within 24 hours and close within 5 to 10 business days. Missing documents are the most common cause of delays.

Thin comps or inflated ARV: If the lender or appraiser cannot find recent renovated sales to support your projected resale price, leverage gets cut. This is the most common reason a deal does not close as expected.

Insufficient reserves: If you are bringing the bare minimum cash to close and have nothing left in the bank, lenders see a borrower who cannot handle a $5,000 surprise. Reserves are not optional.

Unclear entity structure: Buying through a newly formed LLC with no operating agreement, or through an entity in a different state with no foreign registration, creates title and legal friction that delays closing.

No contractor or vague scope: Telling a lender you will "figure out the contractor after closing" is a red flag. The lender needs to know the renovation will actually happen on budget and on time.

Title issues: Outstanding liens, tax delinquencies, probate complications, or unresolved ownership disputes can delay or kill a deal regardless of how strong the borrower is. Order a title search early to catch problems before they derail your timeline.

The borrowers who close fastest treat the loan application like a business proposal. Clean documentation, realistic numbers, and a clear exit plan make the lender's job easier and get you to the closing table faster.