ARV After Repair Value Lending 2026: How Fix-and-Flip Lenders Use It

ARV lending is the core mechanic behind fix-and-flip bridge loans. Instead of lending against what the property is worth today, the lender advances a portion of what the property will be worth after renovation is complete. The amount the lender is willing to advance, and on what basis, determines how much capital the investor needs to bring to the deal.

How ARV Is Established

• ✦An appraiser completes an as-is and as-improved appraisal, also called a subject-to appraisal, for the property. The as-is value reflects current condition. The as-improved value reflects the projected value after the planned scope of work is complete.
• ✦The lender commissions the appraisal or reviews one provided by the borrower. Most hard money and bridge lenders use their own preferred appraisers or AMCs.
• ✦The scope of work submitted by the borrower is reviewed against the as-improved value to assess feasibility. A renovation budget that does not support the projected value increase is a red flag.

Typical ARV Lending Parameters

• ✦Loan-to-ARV: most fix-and-flip lenders advance 65 to 75 percent of ARV. Some go to 80 percent for experienced investors with strong track records.
• ✦Loan-to-cost: many lenders also cap advances at 85 to 90 percent of total project cost (purchase plus renovation). The binding constraint is whichever produces the lower loan amount.
• ✦Renovation holdback: the renovation budget is held in escrow and disbursed in draws as work is inspected and verified complete. The lender typically conducts 2 to 4 draw inspections.
• ✦Rate and term: fix-and-flip bridge loans run 9 to 13 percent, 6 to 24 months, interest-only payments during the renovation period.

Key Risk Factors ARV Lenders Evaluate

• ✦Investor experience: lenders tier their programs. First-time investors get lower ARV advance percentages and more conservative draw structures.
• ✦Market absorption: if the ARV assumes a sale price above recent comparable sales, the lender may reduce their ARV acceptance.
• ✦Renovation complexity: structural work, foundation work, or full gut rehabs carry more risk than cosmetic renovation. Lenders price this into rate and advance amount.