A fix and flip loan is short-term financing designed for investors who purchase distressed properties, renovate them, and sell for a profit. Unlike a standard bridge loan, fix and flip financing typically funds both the acquisition and the renovation costs in a single structure. The lender underwrites based on the after-repair value (ARV) of the property rather than its current as-is value, which allows investors to finance more of the total project cost.
How Fix and Flip Loans Are Structured
- ✦Loan-to-cost (LTC): most lenders fund 75-90% of total project cost (purchase + renovation budget)
- ✦Loan-to-ARV: typically capped at 65-75% of the completed property's projected value
- ✦Renovation funds: held in escrow and released in draws as work is completed and inspected
- ✦Term: 6-18 months; 12 months is most common
- ✦Rate: 9-13% interest-only in 2026; points typically 1-3 at origination
- ✦No prepayment penalty on most programs (important since exit is typically fast)
What Lenders Evaluate on Fix and Flip Files
Fix and flip lenders focus on the deal, not the borrower's income. The key underwriting factors are: the property's ARV supported by an appraisal, the renovation scope and budget, the borrower's investor experience (track record of completed projects), and the exit strategy. Lenders want to know the investor can complete the project on budget and sell or refinance it within the loan term. A detailed project budget and contractor quotes are standard requirements.
Active Fix and Flip Lenders in 2026
- ✦Lima One Capital: experienced investor focus; up to 90% LTC and 75% ARV; competitive on rate for strong borrowers
- ✦New Silver: fast digital process; 65-75% ARV; suited for experienced flippers with clean track records
- ✦Acra Lending: 1-4 unit fix and flip; competitive ARV LTV; 620+ FICO
- ✦Change Wholesale Liquid 360: up to $5M; no DTI; experienced investors; fast close focus
- ✦RCN Capital: national lender specializing in fix and flip; tiered pricing based on experience
The Draw Process and How It Works
Renovation funds are not released at closing. They are held in escrow and released in stages as the project progresses. After each phase of work is completed, the borrower requests a draw. The lender sends an inspector to verify the completed work matches the draw request. Funds are released, typically within 24-72 hours of a satisfactory inspection. Understanding the draw timeline is critical for cash flow management -- investors who cannot bridge the gap between completing work and receiving a draw can run into liquidity problems mid-project.
Aria knows the fix and flip programs, draw processes, and ARV lending policies for the major hard money and bridge lenders. Ask Aria to route a fix and flip deal at vicariointel.com.
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