Fix and Flip Loans — Purchase And Rehab On One Loan

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Fix and Flip Loan Options — New Jersey, Connecticut & Florida, 2026

A Fix and Flip loan is a short-term, business-purpose loan built for one job: buy a property, renovate it, and sell it for a profit within roughly six to eighteen months. Because the loan is secured by the deal itself, approval leans on your credit, your liquidity, and how your purchase price plus renovation budget compares to the property’s after-repair value, or ARV. Newer flippers typically put down 15% to 20% and get more hand-holding on draws. Experienced investors with completed flips behind them often qualify for our lowest tier, around 10% down, and move faster since underwriting already trusts the plan. Either way, closing looks nothing like a 30-day conventional purchase — we routinely close in a week to ten days, because the property drives the timeline, not your pay stubs. Mortgage-World.com (NMLS #1630225) is licensed in New Jersey, Connecticut, and Florida and reviews every deal at no cost. Call 888.958.5382 or apply free.

Side-by-Side Comparison

Loan Program Comparison — Credit Score, Down Payment & Loan-to-Cost

Every Fix and Flip project is different. Here is how our three most common structures compare.

How Financing Works

How a Fix and Flip Loan Works, Start to Finish

Think of a Fix and Flip loan as two pieces stitched into one closing. The first piece funds the purchase, sized to your down payment and your program’s loan-to-cost cap. The second piece is a rehab reserve, held back by the lender and released to you in stages as work is completed and verified. You don’t get the full rehab budget on day one, and that’s by design — it protects the lender, and it protects you too, since it keeps a contractor from walking off with a large deposit and no finished work to show for it.

Purchase Funding and Rehab Draws

At closing, the lender funds the purchase price up to your program’s loan-to-cost limit, and you bring the rest as your down payment plus closing costs. The rehab budget sits in a holdback account. As you finish a phase of work — demo, framing, mechanicals, finishes — a third-party inspector confirms the progress and the lender releases that draw, typically within a few business days. Most lenders allow three to five draws on a standard project, and some will advance a small first draw at closing if the scope calls for immediate demo. Because you only pay interest on funds actually disbursed, your carrying costs stay lower than they would on a lump-sum loan.

Qualifying Basics

Credit Score and Investor Experience Requirements

Because a Fix and Flip loan is a business-purpose loan rather than a consumer mortgage, it sits outside many of the ability-to-repay rules that govern owner-occupied financing — the Consumer Financial Protection Bureau’s own commentary on Regulation Z spells out that exemption for loans made primarily for a business purpose. In practice, underwriting leans harder on your credit score, liquidity, and project history than a typical purchase loan would.

First-Time Flippers vs. Experienced Investors

If this is your first flip, expect a slightly higher down payment, a closer look at your reserves, and possibly a requirement to work with a licensed general contractor. Once you have two or three completed, sold projects behind you, pricing and down payment both loosen up, and draw turnaround tends to move faster since the lender has already seen you execute a plan and sell on schedule. Either way, a 600 credit score is our floor, though borrowers above 680 typically see meaningfully better pricing.