A fix and flip loan pays for most of the purchase and all of the renovation on a house you plan to improve and sell. Ambition Lending lends up to 90% of the purchase price plus 100% of the rehab, capped at 75% of ARV, and returns a term sheet within 24 hours on most requests. We underwrite the deal — the price you're paying, the value after repairs, the budget and the exit — rather than your tax returns.
Fix and flip loan terms at a glance
| Loan size | From $100,000, no fixed maximum |
|---|---|
| Purchase leverage | Up to 90% of purchase price |
| Rehab funding | Up to 100% of the rehab budget, released in draws |
| Maximum loan | 75% of after-repair value (ARV) |
| Typical pricing | 8–12% interest and 2–4 points, deal-dependent |
| Term | Typically 12–18 months, interest-only |
| Property types | 1–4 unit residential, condos and townhomes |
| Markets | Nationwide, including metropolitan, suburban and rural markets |
| Exit | Sell the property, or refinance into a long-term DSCR rental loan |
| Borrower | Business-purpose only; LLC or individual investor |
How the loan amount is sized
Three limits apply, and the lowest one wins: 90% of purchase, 100% of rehab, and 75% of ARV in total. Example: a $200,000 purchase with a $60,000 rehab and a $360,000 ARV. 90% of purchase is $180,000 and the full rehab is $60,000, for $240,000 — under the ARV cap of $270,000, so the loan is $240,000 and you bring the remaining $20,000 of the price plus points and closing costs. If the ARV were $300,000, the cap would be $225,000 and you'd bring $15,000 more. Run your own deal in the fix and flip profit calculator, and read how to calculate ARV the way a lender does before you rely on a number.
What is the minimum down payment on a fix and flip loan?
With Ambition Lending the minimum down payment is about 10% of the purchase price, because the loan covers up to 90% of it. Your actual cash in the deal is often higher, because the total loan cannot exceed 75% of the after-repair value (ARV) and because points, closing costs and early rehab spending are paid from your funds.
Three separate cash needs make up what you bring to a flip:
- The purchase gap: the purchase price minus the loan's share of it, at least 10%.
- The ARV-cap gap: if 90% of purchase plus 100% of rehab is more than 75% of ARV, the total loan is cut to the cap and you fund the difference.
- Costs outside the loan: points (typically 2–4%), title, escrow and other closing costs, insurance, and the reserves a lender wants to see. Rehab work done before your first draw is usually funded by you and reimbursed afterward.
The table below shows how the first two interact. All three deals are hypothetical and use a 3% point assumption, which sits inside the typical 2–4% range; actual pricing and closing costs depend on the deal.
| Hypothetical deal | Purchase / rehab / ARV | Loan before cap | 75% ARV cap | Loan | Your cash toward price and rehab | Points at 3% |
|---|---|---|---|---|---|---|
| A: strong spread | $200,000 / $60,000 / $360,000 | $240,000 | $270,000 | $240,000 | $20,000 | $7,200 |
| B: thin ARV | $200,000 / $60,000 / $300,000 | $240,000 | $225,000 | $225,000 | $35,000 | $6,750 |
| C: heavy rehab | $200,000 / $100,000 / $320,000 | $280,000 | $240,000 | $240,000 | $60,000 | $7,200 |
In deal A the cap does not bind, so your cash is the 10% purchase gap. In deal B the same purchase and rehab need $15,000 more cash only because the ARV is lower. In deal C a larger rehab pushes the loan into the cap, so you fund 20% of the total project cost even though the purchase gap alone would be $20,000. Before points and closing costs, deal A needs $20,000; with 3% points it is $27,200, and deals B and C come to $41,750 and $67,200.
The practical lesson is that a conservative ARV, not the purchase price, usually sets your down payment. Test your numbers with the fix and flip profit calculator, check the rest of the cash picture in how much cash to close you need on a hard money loan, and see how reserves are viewed in borrower liquidity and reserves. Because the ARV drives the cap, calculating ARV like a lender matters as much as the price you negotiate. Down payment is only part of cost; hard money closing costs are the other part. Ambition Lending does not promise approval, and each term sheet sets the exact leverage for the deal.
When a fix and flip loan makes sense
- The property needs work that a bank or conventional lender won't finance in its current condition.
- You want to keep cash free for the next deal instead of paying for the rehab out of pocket.
- The seller wants a quick, certain close and you need a lender that underwrites the asset.
- The spread between all-in cost and ARV still leaves profit after interest, points, holding and selling costs — see holding costs and selling costs.
It makes less sense when the margin only works if the ARV comes in at the top of the comps, or when the timeline assumes nothing goes wrong. Interest and points are a cost of time; see hard money rates explained for how pricing is set and how to compare offers.
How we underwrite a flip
- Purchase basis: what you're paying against as-is value. Buying well is the biggest protection for you and for us.
- ARV support: recent comparable sales that match the finished scope — size, condition, location — confirmed by an appraisal or valuation.
- Rehab budget: line-item by trade, with materials, labor and contingency, and a scope that matches the ARV. See how to build a rehab budget lenders approve.
- Execution plan: who is doing the work, permits needed, and a realistic sequence and timeline.
- Exit: resale demand and days on market for the finished product, plus a backup — renting and refinancing into a DSCR loan. See when to refinance from hard money into DSCR.
- Borrower: experience, liquidity for down payment, closing costs and reserves, and credit as one input. Full list in hard money loan requirements.
How rehab draws work
The rehab portion isn't handed over at closing. It is held back and released in draws as work is completed: you submit a draw request with photos and invoices, the completed work is inspected against your budget, and funds for that work are released. Most investors fund the first phase themselves and are reimbursed on the first draw.
Draws move fastest when budget milestones match work an inspector can verify — demo, rough-in (plumbing, electrical, HVAC), drywall, finishes, punch list. Vague line items, missing photos and unannounced scope changes are what slow them down. The full walkthrough is in hard money draw schedules explained.
Mistakes that cost flippers money
- Overstating ARV or assuming the house sells in days.
- Underestimating holding costs — interest, insurance, taxes and utilities run every month the project slips.
- Ignoring permit timelines when the scope touches structure, electrical or additions.
- Hiring a contractor whose capacity doesn't match the job.
- No contingency and no backup exit if resale demand softens.
What to send for a term sheet
- Property address and the signed purchase contract.
- Line-item rehab budget and scope of work, with your contractor.
- Your ARV estimate and the comparable sales behind it.
- Your exit plan — sale, or rent and refinance.
- Track record (past flips or rentals) and entity documents if closing in an LLC.
The complete checklist is in what documents you need for a fix and flip loan. Investing in Arizona? See fix and flip loans in Phoenix. Holding the property instead of selling? Look at rehab-to-rent loans. Ready to go: send the deal or estimate it first in the hard money loan calculator.
Frequently asked questions
What is the minimum down payment on a fix and flip loan?
At Ambition Lending the loan covers up to 90% of the purchase price, so the floor is about 10% of the purchase price. The 75% of ARV cap can raise it: if 90% of purchase plus the rehab exceeds 75% of ARV, you fund the difference, and you also pay points, closing costs and any early rehab spending.
How much will a fix and flip loan cover?
Up to 90% of the purchase price and 100% of the rehab budget, as long as the total loan stays at or below 75% of the after-repair value (ARV). Whichever limit is lower sets the loan amount.
What are fix and flip loan rates?
Ambition Lending's fix and flip loans are typically priced at 8–12% interest and 2–4 points, interest-only. Leverage, experience, the property and the exit set where a deal lands in that range.
How are rehab funds paid out?
Rehab money is held back at closing and released in draws as work is completed. You request a draw, the work is inspected against your line-item budget, and funds for the verified work are released.
Can a first-time investor get a fix and flip loan?
Experience is preferred, but first-time investors may qualify with a well-bought property, a realistic line-item budget and an experienced contractor.
Do you check credit on a fix and flip loan?
Credit is reviewed, but it is one factor alongside the property, the purchase price, the ARV, your liquidity and the exit. We do not publish a single minimum score.
What happens if the flip doesn't sell?
A common backup exit is to rent the property and refinance into a long-term DSCR loan qualified on the rent. Planning that option before closing reduces risk if resale demand softens.
Updated by the Ambition Lending credit team.
