Fix and flip loans are the lifeblood of the house flipping business. Without fast, flexible financing, most fix-and-flip deals simply can’t get done — conventional banks are too slow, too strict, and won’t lend on distressed properties. This guide covers everything you need to know about fix and flip loans in 2025.
What Is a Fix and Flip Loan?
A fix and flip loan is a short-term hard money loan designed specifically for investors who purchase distressed properties, renovate them, and sell for a profit. Unlike conventional mortgages, fix and flip loans cover both the purchase price and the renovation costs — giving you all the capital you need in a single loan.
How Fix and Flip Loans Work
Here’s the typical structure of a fix and flip loan:
- Purchase financing: 80–90% of the purchase price
- Rehab financing: 100% of renovation costs (drawn in stages as work is completed)
- Total cap: Usually 70–75% of the after-repair value (ARV)
- Term: 6–18 months
- Rate: 8.75–13% annually
- Payments: Interest-only monthly payments during the loan term
- Repayment: Full loan balance due when property sells
Fix and Flip Loan Requirements
| Requirement | Typical Range |
|---|---|
| Credit score | 600–680 minimum |
| Down payment | 10–20% of purchase price |
| Experience | 0–5 prior flips (varies by lender) |
| Property type | 1–4 unit residential, non-owner occupied |
| Loan amount | $50,000–$5,000,000+ |
| Exit strategy | Sale or refinance within loan term |
Best Fix and Flip Lenders in 2025
- RCN Capital — Best rates from 8.75%, available in 45+ states
- Kiavi — Highest leverage at 90% LTC, tech-driven platform
- Lima One Capital — Best for new investors, lowest credit minimum
- CoreVest Finance — Strong for portfolio investors
- Groundfloor — No minimum credit score, crowdfunded model
Fix and Flip Loan vs HELOC vs Hard Money
Many investors wonder if they should use a fix and flip loan, a HELOC on their primary residence, or a personal hard money loan. Here’s the bottom line: fix and flip loans are purpose-built for this strategy and offer the best combination of leverage, speed, and flexibility for most investors.