Questions, answered.

We are asset-based, which means we underwrite the property, its equity, and your business plan rather than your personal income and tax returns. That lets us fund in days instead of the 30 to 60+ days a bank takes, on short interest-only terms built around a flip, refinance, or sale. You pay a higher rate than a bank in exchange for speed, flexibility, and certainty on deals a bank cannot fund in time.

Most of our borrowers take title in a business entity such as an LLC, corporation, or partnership rather than personally. What makes a loan business-purpose is how the funds are used, buying, improving, or refinancing investment or commercial property, not the entity that borrows. Holding the property in a single-purpose LLC is standard practice for investors and quick to set up; talk to your attorney or CPA about the right structure, and we can walk you through what we need before closing.

No. Every program we offer is a business-purpose loan for investment or commercial real estate, not a consumer mortgage. You cannot use these loans to buy or refinance the home you live in. The deciding factor is the purpose of the loan, financing non-owner-occupied or income property, not the property type alone.

Every figure carries the date we read it, and we correct our pages as the rules change. Local figures come from a primary source: the county assessor, the state department of revenue, the city code or permit portal. Local rules move, sometimes mid-quarter: a council can reset impact fees, an occupancy cap can be repealed, an assessment ratio can change. We correct our pages as those rules change, and where something is mid-change or we could not verify it, we say so on the page instead of guessing. Before you commit a budget, confirm anything that drives it with the city or county, and talk to your attorney or CPA on questions of law or tax.

We are a direct private lender working in most states. A few programs carry state-specific nuances, so we will confirm availability for your exact scenario the first time we talk.

Fix and flip and residential bridge loans typically close in 5 to 7 days once we have your basics. Rental (DSCR) loans usually take 2 to 3 weeks because of the appraisal and rent verification, and SBA financing runs 30 to 90 days. The biggest variable is how quickly title, insurance, and your documents come together.

We do run credit, but on our asset-based loans it carries far less weight than at a bank, and weaker credit can often be offset with a larger down payment or lower leverage. There is no personal income test on these programs. Credit matters most on long-term rental loans, where we look for a 640 minimum and it affects your rate and leverage.

Generally no. Our bridge, fix and flip, and construction loans qualify off the property and your equity, and our DSCR rental loans qualify off the property's rent, so we do not ask for W-2s or pay stubs. We will want to see bank statements or proof of reserves. SBA and conventional investment loans are the exceptions and are fully documented.

Just the basics of the deal: the property address or type, the purchase price or current value, your rehab budget, the loan amount, and your exit plan. We can often pre-qualify you over the phone or through a short application and issue a proof-of-funds letter before you are even under contract.

A point is an upfront fee equal to 1% of the loan amount, and origination on private loans typically runs 1 to 3 points. Our rates are higher than a bank, generally in the high single digits to low teens depending on the program, because the loans are short, fast, and flexible. When you compare offers, weigh the rate and the points together as your true cost of capital.

Tell us early. Our fix and flip terms run 6 months, so if a project is trending long, the most important thing is to reach out well before maturity. Depending on your progress and the deal, we may be able to work out an extension, but that is handled case by case and is not guaranteed. The sooner we know, the more we can do to keep you moving toward a successful exit.

We fund up to 90% of the purchase price and up to 100% of your rehab budget, with the total capped against the after-repair value (ARV). Rehab money is released in draws as the work is completed.

Our fix and flip pricing starts around 9.99%, interest-only, with origination typically 1 to 3 points depending on your experience, leverage, and the deal, and every quote is subject to underwriting. Across the market most flip loans run roughly 9% to 12%. On most flip loans, including ours, interest is charged on the full loan amount, rehab budget included. Paying interest only on rehab funds as you draw them exists in the market, but it is the exception, not the rule.

No. We work with first-time flippers as well as full-time operators. Experience mainly affects your leverage and rate, since a longer track record earns higher loan-to-cost and better pricing. A newer investor can still get funded with a sound deal, a realistic budget, and a clear exit.

We can get you a term sheet the same day on a complete application, and we typically fund within 48 hours of clear title. The main variable is how fast title and insurance come together, which is why a full close usually runs 5 to 7 days. Because we are the lender and underwrite in house, there is no second layer of approval to wait on.

No. Our fix and flip loans have no prepayment penalty, so paying off early when the property sells costs you nothing extra. Terms run 6 months, and because there is no penalty, selling sooner never costs you extra.

We run credit, but this is an asset-based loan, so the property, your budget, and the ARV matter most. We do not ask for W-2s or tax returns to qualify a flip. We will want to confirm you have reserves to carry the project to its exit.

No. First-time flippers are welcome, and experience is a pricing and leverage input rather than a gate. What an experienced investor buys is more leverage and a better rate, not access. A first deal with a realistic budget, a sensible ARV and a clear exit is a fundable file. Experience matters most on ground-up construction, where the risk is different. Full guide: Fix and Flip Loan Requirements: What You Need to Get Funded

There is no hard floor the way there is on DSCR, because the loan underwrites the asset and the deal. Weaker credit typically means lower leverage rather than a decline, and there is no personal income test. Credit affects your rate. The deal's numbers and your exit decide the file. Full guide: Fix and Flip Loan Requirements: What You Need to Get Funded

Fix and flip loans are asset-based, so credit carries less weight than at a bank. A reasonable profile helps your rate and leverage, and weaker credit can often be offset with more equity. Full guide: Fix and Flip Loan Requirements: What You Need to Get Funded

Up to 90% of the purchase price and up to 100% of the rehab budget, with total exposure capped under a percentage of the after-repair value (ARV). Full guide: Fix and Flip Loan Requirements: What You Need to Get Funded

Yes. Experience helps leverage and pricing, but a first-timer with a sound deal, a realistic budget, and a clear exit can still get funded. Full guide: Fix and Flip Loan Requirements: What You Need to Get Funded

The refinance sets the floor, not the purchase. The buy-and-rehab leg is asset-based, where credit is a pricing and leverage input rather than a gate. The refinance into a DSCR loan starts at 640. So the score that matters is the one you will have at refinance, which is worth checking before you buy rather than after the rehab is done. Full guide: Financing the BRRRR Method: Buy, Rehab, Rent, Refinance, Repeat

Up to 80% LTV on a DSCR refinance, measured against the appraised value after repairs. Whether that returns your capital depends on your all-in basis: if purchase plus rehab plus costs sits near 80% of the finished value, you recover most of it. If you overpaid or overspent on finishes, you leave money in the deal. That arithmetic is the whole strategy. Full guide: Financing the BRRRR Method: Buy, Rehab, Rent, Refinance, Repeat

Long enough for the property to be rented and covering its payment, since DSCR qualifies on the rent. Seasoning requirements vary by program and by how the appraised value is being used, so confirm the specific rule for your file before you plan around a date. The practical gate is usually a signed lease and a completed rehab, not the calendar. Full guide: Financing the BRRRR Method: Buy, Rehab, Rent, Refinance, Repeat

Buy, Rehab, Rent, Refinance, Repeat, a strategy for building a rental portfolio while recycling the same capital across deals. Full guide: Financing the BRRRR Method: Buy, Rehab, Rent, Refinance, Repeat

A short-term fix and flip or bridge loan for the buy and rehab, then a long-term DSCR loan to refinance and pull your capital back out. Full guide: Financing the BRRRR Method: Buy, Rehab, Rent, Refinance, Repeat

Sometimes. A cash-out DSCR refinance can return much or all of your capital if the property's new value and rent support it. Full guide: Financing the BRRRR Method: Buy, Rehab, Rent, Refinance, Repeat

The lender's appraiser, and that is the number the loan is sized against. Your own comps matter for deciding whether to buy, but they do not set your leverage. This is the most common reason a fix and flip loan comes in smaller than expected: the ARV cap binds before the purchase-price cap does. Get a realistic ARV read before you go under contract, not after. Full guide: What Is ARV (After-Repair Value) and How Do You Calculate It?

Your loan shrinks and you bring the difference in cash. Because financing is capped to ARV, a lower finished-value opinion reduces the total the lender will advance across purchase and rehab together. The options are to bring more cash, renegotiate the purchase price, reduce the rehab scope, or walk. Knowing that before the appraisal is what makes the decision calm rather than urgent. Full guide: What Is ARV (After-Repair Value) and How Do You Calculate It?

Only up to a point, and past it you are spending money the market will not return. Appraisers value the finished property against comparable sales in that submarket, not against your receipts. Finishes above what the comps support add cost without adding value, which is the classic way a technically well-run flip still loses money. Full guide: What Is ARV (After-Repair Value) and How Do You Calculate It?

ARV stands for after-repair value, the estimated market value of a property once the planned renovation is complete. Full guide: What Is ARV (After-Repair Value) and How Do You Calculate It?

The purchase price is what you pay for the property as-is. ARV is what it will be worth after the rehab, based on comparable sold properties in finished condition. Full guide: What Is ARV (After-Repair Value) and How Do You Calculate It?

The 70% rule says an investor should pay at most 70% of a property's ARV minus the rehab budget. It is a quick screening filter, not a precise underwriting tool. Full guide: What Is ARV (After-Repair Value) and How Do You Calculate It?

A point is an upfront fee equal to 1% of the loan amount, and origination typically runs 1 to 3 points. On a $400K loan, 2 points is $8,000 due at closing. Points and rate are levers a lender trades against each other, so compare the rate and the points together as your true cost of capital rather than shopping on the rate alone. Full guide: Hard Money Loan Rates and Costs, Explained

You are paying for speed, for flexibility, and for a lender who will fund a property a bank will not. These loans are short, they close in as few as 5 to 7 days, and they are underwritten on the asset rather than a documented income file. That is a real service with a real cost. On a six-month hold, the rate difference is often smaller than the deal you lose by closing slowly. Full guide: Hard Money Loan Rates and Costs, Explained

The carry, and the exit. Interest-only payments across the hold, plus title, insurance, appraisal and legal, plus any extension if the project runs long. Extensions are handled case by case and are not guaranteed. Budget the hold you expect and then ask what one more month costs, before you need the answer. Full guide: Hard Money Loan Rates and Costs, Explained

You pay more because the lender funds fast, takes on more risk, and lends against the asset and your plan rather than your income. The premium buys speed, flexibility, and certainty. Full guide: Hard Money Loan Rates and Costs, Explained

A point equals 1% of the loan amount, paid at closing as origination. A 2-point fee on a $300,000 loan is $6,000. Full guide: Hard Money Loan Rates and Costs, Explained

Most short-term hard money loans are fixed, interest-only for the term. Because the loan lasts months, the total carry cost matters more than the headline rate. Full guide: Hard Money Loan Rates and Costs, Explained

Whichever comes in lowest, and on a value-add deal that is usually not the one you expected. Our ground-up program runs to 70% LTV or 85% LTC, and LTC binds more often because it measures against total cost. On fix and flip, the ARV cap frequently binds before the purchase-price cap. Model all of them, not just the headline number. Full guide: LTV vs LTC: What's the Difference?

Because they protect against two different failures. LTV asks whether the finished property is worth enough to repay the loan. LTC asks whether you have real money in the deal. A borrower who buys well can look excellent on LTV while having almost nothing at risk, and LTC is the constraint that catches it. Full guide: LTV vs LTC: What's the Difference?

LTV measures the loan against the property's value; LTC measures it against the total cost of the project. LTC is used during a build or rehab, LTV on a finished or stabilized property. Full guide: LTV vs LTC: What's the Difference?

Construction loans lead with LTC (loan-to-cost), because the finished value does not exist yet. Leverage is sized against land plus construction costs. Full guide: LTV vs LTC: What's the Difference?

Yes. Fix and flip loans often combine purchase leverage and rehab funding while also capping total exposure at a percentage of after-repair value (ARV). Full guide: LTV vs LTC: What's the Difference?

Not honestly, and you should treat any lender promising it with suspicion. Asset-based lenders want the borrower to have real equity at risk. What genuinely exists is 90% of the purchase price and 100% of the rehab budget, capped to ARV, so your cash is roughly 10% of purchase plus closing costs. The rehab being fully fundable is the part most investors do not realise. Full guide: Can You Fund a Fix and Flip With No Money Down?

Partner equity, seller financing behind the first, or buying well below value. None of these are a lender product, and each carries its own trade. A partner takes part of your profit. Seller carry-back needs the first lender to permit a junior lien, which many do not. Buying at a genuine discount is the only one that improves the deal rather than moving the risk around. Full guide: Can You Fund a Fix and Flip With No Money Down?

Usually yes, and on a marginal file it can be the difference between an approval and a decline. More equity lowers the lender's exposure, so it can offset weaker credit or thinner experience. Pricing comes as a rate plus 1 to 3 points, and leverage is one of the few inputs you directly control. Full guide: Can You Fund a Fix and Flip With No Money Down?

Truly zero out of pocket is uncommon. Investors get close by combining high-leverage financing (up to 90% of purchase, 100% of rehab) with a partner, private money, or a strong below-market purchase. Full guide: Can You Fund a Fix and Flip With No Money Down?

Usually some, for the down payment and closing costs, but a below-market deal, high leverage, and a partner can shrink that to a minimum. Full guide: Can You Fund a Fix and Flip With No Money Down?

Title and insurance, almost every time. Fix and flip and residential bridge files typically close in 5 to 7 days once we have your basics, and we can fund within 48 hours of clear title. The delays that happen are liens or heirs surfacing on title, or a binder that has not been ordered. Start both on day one, not after underwriting. Full guide: How Fast Can a Hard Money Loan Close?

Sometimes, and the honest constraint is not us. We issue same-day term sheets and decide in house, so our side compresses. What does not compress is a title search, a payoff letter from an existing lender, or a county recording office. If you have a hard date, say so at the first call so the file is ordered in the right sequence. Full guide: How Fast Can a Hard Money Loan Close?

Often 5 to 7 days for bridge and fix and flip loans, compared with 30 to 60+ days for a bank. DSCR rental loans take a little longer, and SBA loans much longer. Full guide: How Fast Can a Hard Money Loan Close?

Usually title issues, insurance, or slow document turnaround from the borrower, not the lender's underwriting. A clean file closes fast. Full guide: How Fast Can a Hard Money Loan Close?

A term sheet can come the same day on a complete file, and we typically fund within 48 hours of clear title, subject to underwriting. The main variable is how fast title and insurance come together, which is why a full close typically takes 5 to 7 days. Full guide: How Fast Can a Hard Money Loan Close?

Around 10% of the purchase price, because the program reaches 90% of purchase and 100% of the rehab budget. Your cash is that remaining 10% plus closing costs and any carry. The whole amount is capped to ARV, so on a deal where the finished value is thin, the ARV cap binds before the purchase cap does and you bring more. Full guide: How Much Down Payment Do You Need for a Fix and Flip?

Not from a lender underwriting the deal honestly. Every asset-based lender wants the borrower to have real equity at risk, and 100% of purchase plus 100% of rehab is not a product we offer. What does exist is 100% of the rehab budget, which is the part most investors do not realise is fundable and is usually where the cash crunch actually is. Full guide: How Much Down Payment Do You Need for a Fix and Flip?

Yes, though less than it would at a bank. On an asset-based flip loan credit is a pricing and leverage input rather than a pass-fail gate, and weaker credit typically means lower leverage rather than a decline. There is no personal income test. The bigger levers are the deal's numbers and your experience with that property type. Full guide: How Much Down Payment Do You Need for a Fix and Flip?

Usually around 10% of the purchase price, since lenders fund up to 90% of purchase. You also cover closing costs and float the rehab between draws. Full guide: How Much Down Payment Do You Need for a Fix and Flip?

Yes, up to 100% of the rehab budget, reimbursed in draws as work is completed and inspected. You typically fund each stage first and get reimbursed. Full guide: How Much Down Payment Do You Need for a Fix and Flip?

Yes, with a strong below-market purchase, a partner or private money, or higher leverage earned through experience. Full guide: How Much Down Payment Do You Need for a Fix and Flip?

The one that controls its own capital and decides in house. Ask any lender two questions: whose money is it, and who signs off. A lender deploying its own capital can commit to a date; one assembling funds per deal cannot, however good the intent. On a contract with a hard closing date that certainty is worth more than a small rate difference. Full guide: Hard Money vs Private Money: What's the Difference?

Sometimes, and sometimes considerably more. An individual lender has no published book holding them to consistent terms, so pricing varies with their appetite that month. Program lenders charge 1 to 3 points on top of the rate. Compare rate and points together, then compare the certainty, which never appears on a term sheet. Full guide: Hard Money vs Private Money: What's the Difference?

They overlap. Hard money is asset-based lending from a professional lender with set programs; private money is from an individual with negotiable, relationship-based terms. People often use the terms interchangeably. Full guide: Hard Money vs Private Money: What's the Difference?

It depends. Private money from someone you know can be lower-cost or more flexible, but hard money offers defined terms, reliability, and fast, repeatable closings. Full guide: Hard Money vs Private Money: What's the Difference?

Yes. A common structure uses a hard money loan for most of the deal and private money for the down payment or a gap. Full guide: Hard Money vs Private Money: What's the Difference?

Often the same day, and before you are under contract. We can usually pre-qualify over the phone or through a short application and issue the letter off the back of it. What we need is the basics of the deal: property type, price or value, your rehab budget if there is one, the loan amount and your exit. There is no hard credit pull to start. Full guide: What Is a Proof of Funds Letter and How Do You Get One?

No, and any lender who tells you otherwise is overselling it. A proof-of-funds letter says we are prepared to fund a deal of that size on those broad terms. It is not a commitment to lend, and the actual loan remains subject to underwriting, title, insurance and the appraisal. It exists so a seller or an auction will take your offer seriously. Full guide: What Is a Proof of Funds Letter and How Do You Get One?

Usually yes, and on a financed purchase it is often the stronger document. A bank statement shows a balance on one day. A letter from a direct lender using its own capital says someone has underwritten the deal and is prepared to fund it. On auction and off-market purchases in particular, the letter is what listing agents are actually looking for. Full guide: What Is a Proof of Funds Letter and How Do You Get One?

A document showing a seller or agent that you have the capital or financing to close. For investors, it is usually a lender letter confirming you are pre-qualified to fund up to a set amount, subject to underwriting. Full guide: What Is a Proof of Funds Letter and How Do You Get One?

Get pre-qualified with a lender and request the letter. A private lender can often issue one after a short application, sometimes before you are under contract. Full guide: What Is a Proof of Funds Letter and How Do You Get One?

No. It confirms you are approved to fund up to an amount, but the specific deal still goes through underwriting, title, and insurance before it closes. Full guide: What Is a Proof of Funds Letter and How Do You Get One?

Yes, and it is a common and entirely fundable path, as long as you plan the refinance rather than discover it. The pattern is buy and rehab on short-term financing, then refinance into a 30 year DSCR loan once the property is rented. What kills it is reaching a 6 month maturity without the rental loan started, so begin that conversation at the halfway point. Full guide: Fix and Flip vs Buy and Hold: Which Strategy Is Right for You?

They are not the same kind of money, so the comparison does not resolve cleanly. A flip converts work into a lump sum in months. A hold builds equity and cash flow over years and gets the tax treatment that comes with it. The honest question is which one your capital, your time and your tolerance for a bad tenant year can support. Full guide: Fix and Flip vs Buy and Hold: Which Strategy Is Right for You?

Flipping produces larger lump sums faster; renting produces smaller, recurring income that compounds over time. Which wins depends on your goals and time horizon. Full guide: Fix and Flip vs Buy and Hold: Which Strategy Is Right for You?

Holding is generally lower risk because it does not depend on a single quick sale, but it ties up capital longer. Flipping is faster but more exposed to market timing and rehab overruns. Full guide: Fix and Flip vs Buy and Hold: Which Strategy Is Right for You?

Yes. Many investors flip for capital and hold for wealth, and the BRRRR method deliberately combines the two. Full guide: Fix and Flip vs Buy and Hold: Which Strategy Is Right for You?

The basics of the deal, and nothing more to start. The property address or type, the purchase price or current value, your rehab budget, the loan amount and your exit plan. We can often pre-qualify over the phone and issue a proof-of-funds letter before you are under contract. There is no hard credit pull to start. Full guide: What Documents Do You Need for a Hard Money Loan?

No, on the asset-based programs. Bridge, fix and flip and construction loans qualify on the property and your equity; DSCR qualifies on the rent. We will want bank statements or proof of reserves, entity documents if you are closing in an LLC, and insurance. SBA and conventional are the exceptions and are fully documented. Full guide: What Documents Do You Need for a Hard Money Loan?

The purchase contract, a scope of work and budget for a rehab, entity documents, bank statements showing reserves, an insurance binder, ID, and an exit plan. No tax returns or W-2s on most programs. Full guide: What Documents Do You Need for a Hard Money Loan?

Generally no. Asset-based loans qualify on the property and your plan, so they skip tax returns and pay stubs, though they verify reserves and the entity. Full guide: What Documents Do You Need for a Hard Money Loan?

Usually title issues, insurance, or slow document turnaround from the borrower, not the lender. A complete file can close in days. Full guide: What Documents Do You Need for a Hard Money Loan?

You cover the difference, because the loan was sized to the budget you submitted. Financing runs to 100% of the rehab budget but is capped to ARV, so an overrun is not automatically fundable. Build a contingency into the number you submit rather than into your head, and raise a change in scope before you spend it, not after. Full guide: How to Estimate a Rehab Budget

Only while the finished value supports it. The total across purchase and rehab is capped to ARV, so past the point the comps justify, extra budget is money you fund yourself and do not get back. Appraisers value against comparable sales in that submarket, not against your receipts. Full guide: How to Estimate a Rehab Budget

Build a detailed scope of work by area and system, price each line from contractor quotes or known unit costs, and add a contingency (often 10-20%) plus carrying costs. Full guide: How to Estimate a Rehab Budget

Commonly 10-20%, to cover hidden problems that surface once work begins, like wiring, plumbing, or structural issues behind walls. Full guide: How to Estimate a Rehab Budget

The lender funds the rehab in draws against your budget and caps total loan exposure under the after-repair value, so a realistic budget keeps the deal and your draws on track. Full guide: How to Estimate a Rehab Budget

Sometimes, and usually by trading them against the rate rather than removing them. Points and rate are two ends of one lever: fewer points generally means a higher rate. What actually moves pricing is the strength of the file, loan size, leverage, experience and credit. Compare offers on rate and points together, which is the only number that decides your cost of capital. Full guide: Points and Origination Fees: What You Actually Pay

Points are earned at closing, so if the loan never closes there are none to refund. What you can spend before closing are third-party costs already incurred, an appraisal or a title search. Ask any lender which costs are due up front and which are collected at closing, and get the answer before you order anything. Full guide: Points and Origination Fees: What You Actually Pay

One point is 1% of the loan amount, paid at closing. Two points on a $500,000 loan is $10,000. Points are separate from the interest rate and are paid whether you hold the loan for one month or twelve. Full guide: Points and Origination Fees: What You Actually Pay

It depends entirely on your hold period. Points are a fixed cost paid up front; interest only accrues while the loan is outstanding. On a short flip you often want fewer points and accept the rate, because you will not hold long enough to earn back the up-front spend. Full guide: Points and Origination Fees: What You Actually Pay

Origination and points are the lender's. Appraisal, title, escrow, recording and transfer taxes are third-party or county costs that are broadly the same regardless of who funds you. Ask any lender to split the two, because only the first group is really being quoted. Full guide: Points and Origination Fees: What You Actually Pay

Add the points to the carry, not the rate alone. Origination typically runs 1 to 3 points, a point being 1% of the loan amount, paid at closing. Then interest-only payments across the hold, plus title, insurance, appraisal and legal. Our fix and flip term is 6 months, so the carry is bounded, which is what makes the total comparable to a conventional loan you would hold for years. Full guide: What a 6-Month Flip Loan Actually Costs

Ask early. An extension may be possible, case by case, and it is never guaranteed. The single most useful thing a borrower can do is flag a slipping timeline well before maturity, while options still exist. Budget the hold you expect, then ask what one more month costs before you need the answer rather than after. Full guide: What a 6-Month Flip Loan Actually Costs

Usually not. Rehab funds are drawn as work completes, and interest typically accrues on what has been drawn rather than the full commitment. Assuming otherwise overstates your finance cost significantly on a large rehab. Full guide: What a 6-Month Flip Loan Actually Costs

Time. Carry runs every month you own the property, and running past your term adds extension fees on top of it. Most flips that lose money lose it on the schedule, not on the purchase price. Full guide: What a 6-Month Flip Loan Actually Costs

Add points, origination, and the interest you will actually pay over your real hold, then compare that single number. A lower rate with more points often costs more on a short hold, because points are paid in full regardless of how early you exit. Full guide: What a 6-Month Flip Loan Actually Costs

Budget the timeline the way you budget the rehab, with contingency in it. The usual causes are permits, inspections and long-lead materials, and all three are visible weeks ahead. A 6 month term with a four-month plan absorbs a normal slip; a six-month plan does not. The other half is starting title and insurance on day one so the front of the project does not eat the buffer. Full guide: Extension Fees: What Happens When a Flip Runs Long

Do not. Call before the date, not after it. An extension is handled case by case, based on your progress and the deal, and is not guaranteed, but the conversation is very different at month five than at month seven. Lenders can work with a project that is behind and communicating. Silence removes the options you would otherwise have. Full guide: Extension Fees: What Happens When a Flip Runs Long

Usually a fee in points on the outstanding balance, sometimes with a rate step-up for the extended period, and you continue paying carry throughout. Terms are set case by case, so the number depends on the deal and how far along it is. Full guide: Extension Fees: What Happens When a Flip Runs Long

As soon as you can see the schedule slipping, ideally two months before maturity. A lender told early is working the problem with you; a lender told at maturity is managing a default, which is a materially worse conversation. Full guide: Extension Fees: What Happens When a Flip Runs Long

Often yes, and it is frequently the better answer. If the property is finished but has not sold, refinancing onto a DSCR loan and renting it converts the flip to a hold and the rent covers the carry. Check seasoning requirements before relying on it. Full guide: Extension Fees: What Happens When a Flip Runs Long

A binder in place before closing, naming the lender, with coverage appropriate to the property and the work. On a rehab that usually means a builder's risk or vacant-property policy rather than a standard landlord policy. Order it on day one. Insurance is one of the two things that most often moves a closing date, and it is entirely within your control. Full guide: Title and Insurance on an Investor Loan

Undisclosed liens, unpaid taxes, and heirs on an estate sale. None of these are unusual and most are solvable, but each takes days that are not in your schedule unless the search started early. On a distressed or auction purchase, assume title will surface something and open the search before you are counting down to a hard closing date. Full guide: Title and Insurance on an Investor Loan

No. A property that is unoccupied and under renovation needs builder's risk or vacant property cover, plus liability for trades on site. A standard homeowner's policy on a vacant rehab can be void when you need it and will stop a funding. Full guide: Title and Insurance on an Investor Loan

The lender not being named correctly as mortgagee or loss payee. It is one line on the certificate, it is wrong surprisingly often, and it holds up funding until a corrected binder is issued. Full guide: Title and Insurance on an Investor Loan

Largely no. Title, escrow and recording are third-party and county costs, not lender margin, so they look similar regardless of who funds you. The lender's own lines - points and origination - are where quotes actually differ. Full guide: Title and Insurance on an Investor Loan

A number that changed after the term sheet. An appraisal or ARV below expectation, a rehab budget that grew, or a rent figure the lease does not support. Because these loans are capped to value, a lower opinion shrinks the loan and you cover the difference. The fix is a realistic value read before you go under contract. Full guide: What Kills a Loan at Underwriting

Answer fast and tell us bad news early. Title and insurance ordered on day one, documents returned the day they are asked for, and a heads-up the moment the scope or the timeline changes. A file that funds in 5 to 7 days does so because nothing waited on a reply. Surprises found at underwriting cost days; surprises disclosed up front usually cost nothing. Full guide: What Kills a Loan at Underwriting

A low appraisal. Leverage is a percentage of value, so a value below expectation shrinks the loan and leaves you covering the gap, usually with days to go. On a rehab, an optimistic ARV is the same failure earlier in the chain. Full guide: What Kills a Loan at Underwriting

Because the source of equity has to be verified. A large deposit with no trail is a problem even when it is completely legitimate. Season the funds and keep the paper trail, and disclose gifts or partner money up front. Full guide: What Kills a Loan at Underwriting

Front-load it. Order title early, get insurance written on the correct basis with the lender named, have entity documents in order, and prepare your documents before you apply. Almost nothing on the list is quick to fix late. Full guide: What Kills a Loan at Underwriting

A DSCR (debt service coverage ratio) loan qualifies on the property's rental income instead of your personal income, so there are no W-2s or tax returns required. We compare the rent, from a signed lease or the appraiser's market-rent estimate, against the monthly payment. A DSCR of 1.00 means the rent covers the payment, and we lend with a DSCR as low as 0.75.

Our rental program starts around 5.50% interest-only, with 30-year fixed and 5/7/10-year ARM options, for a single property or a whole portfolio. The lowest pricing goes to strong credit, lower leverage, and a DSCR above 1.20; your quote depends on the file and is subject to underwriting.

We finance up to 80% loan-to-value on a purchase, with rate-and-term and cash-out refinances available, on loan amounts from $100K to $3M. Cash-out leverage is typically a little lower than purchase. The property's cash flow and your credit set your final leverage.

We start at 640, and the best pricing goes to strong credit. Because the loan qualifies on the asset, your score affects your rate and leverage more than whether you are approved.

Yes, short-term rentals are considered. We can underwrite using market or projected rents, and the property still needs to meet our DSCR. Tell us how the property is operated so we can structure it correctly.

Long-term rental loans usually carry a prepayment penalty, commonly a step-down such as 5/4/3/2/1. We offer flexible prepay structures, including buying down to a shorter penalty for a slightly higher rate, and we will lay out the options on your term sheet.

No. They are different products. A conventional loan is underwritten to your personal income and debt-to-income ratio and follows agency guidelines. A DSCR loan is underwritten to the property's rent against its own payment, which is why it needs no tax returns. The confusion is understandable, since both are long-term rental financing, but only one of them looks at your paycheck. Full guide: What Is a DSCR Loan? How Investors Qualify on Rental Income

The property qualifies, then you do. First we establish the rent, from a signed lease or the appraiser's market-rent estimate. Then we compare it to the full payment including taxes, insurance and any HOA, which gives the DSCR. If that ratio clears the program floor and your credit and down payment fit, the file moves. Expect roughly 2 to 3 weeks, most of it appraisal and rent verification. Full guide: What Is a DSCR Loan? How Investors Qualify on Rental Income

Divide the monthly rent by the monthly payment, including taxes, insurance and HOA. A home renting at $2,400 against a $2,000 payment is 2,400 divided by 2,000 = 1.20. Above 1.00 means the rent more than covers the payment; below 1.00 means it needs support. We lend with a DSCR as low as 0.75, so a property slightly short of breakeven is not automatically out. Full guide: What Is a DSCR Loan? How Investors Qualify on Rental Income

Plan on 20%, since the program reaches 80% LTV. Your credit and the property's DSCR both affect where you land inside that: a stronger ratio and a stronger score buy more leverage. Loan amounts run $100K to $3M, and credit starts at 640. On a refinance the same cap applies to the new loan rather than to cash you bring. Full guide: What Is a DSCR Loan? How Investors Qualify on Rental Income

DSCR stands for debt service coverage ratio. It compares a property's rental income to its loan payment to see whether the rent covers the debt. Full guide: What Is a DSCR Loan? How Investors Qualify on Rental Income

Most lenders want a DSCR of at least 1.00, meaning the rent covers the payment. USA Mortgage lends with a DSCR as low as 0.75. Full guide: What Is a DSCR Loan? How Investors Qualify on Rental Income

No. A DSCR loan qualifies on the property's rent versus its payment, so there are no W-2s or tax returns required. Full guide: What Is a DSCR Loan? How Investors Qualify on Rental Income

No. Conventional financing is underwritten to your personal income and debt-to-income ratio under agency guidelines. A DSCR loan is underwritten to the property's rent against its own payment, with no tax returns and no W-2s. Both are long-term rental financing, which is why the terms get mixed up, but only one of them looks at your paycheck. Full guide: DSCR vs Conventional Loan: Which Is Better for Investment Property?

Conventional, generally. You are trading rate for documentation: our conventional investment program starts at a 580 credit score with documented income, while DSCR starts at 640 and skips the income file entirely. Both reach 80% LTV. If your returns support the loan and you have the time, conventional costs less. If they do not, DSCR is the one that closes. Full guide: DSCR vs Conventional Loan: Which Is Better for Investment Property?

There is no agency limit the way there is on conventional financing, which is usually why investors switch. Conventional programs cap how many financed properties you can hold, and portfolio investors hit that wall. DSCR is business-purpose lending underwritten property by property, so the constraint becomes each deal's own numbers rather than a count. Past 5 properties, a portfolio loan may consolidate them anyway. Full guide: DSCR vs Conventional Loan: Which Is Better for Investment Property?

Neither is universally better. Conventional is usually lower-cost if you can document income and your file fits the box; DSCR is faster, qualifies on the property, and has no property-count cap. Full guide: DSCR vs Conventional Loan: Which Is Better for Investment Property?

Often yes, if your situation changes and the property and your file qualify conventionally. Many investors move between the two over time. Full guide: DSCR vs Conventional Loan: Which Is Better for Investment Property?

Usually modestly higher, in exchange for speed, no income documentation, and qualifying on the asset instead of you. Full guide: DSCR vs Conventional Loan: Which Is Better for Investment Property?

Not on our business-purpose programs, where most borrowers close in an entity. Where it does matter is conventional financing, which is generally written to individuals, so an agency loan and an LLC do not always mix. If the entity is part of your plan, say so before you pick the product, not after you are under contract. Full guide: How to Finance a Rental Property in an LLC

You can, but read the existing loan first. Most mortgages carry a due-on-sale clause, and transferring title into an entity can technically trigger it. Lenders often do not act, but that is not a plan. If you are refinancing anyway, take the new loan in the entity rather than transferring afterwards, and talk to your attorney about your specific loan. Full guide: How to Finance a Rental Property in an LLC

Yes, with business-purpose loans like DSCR or portfolio loans, which are designed to close in an entity's name. Most conventional consumer mortgages cannot. Full guide: How to Finance a Rental Property in an LLC

Usually yes. The loan and title sit with the LLC, but the lender typically asks the principal to personally guarantee it. Full guide: How to Finance a Rental Property in an LLC

Many investors use a single-purpose LLC per property for liability separation and clean books, though some group properties. Confirm structure with your attorney and CPA. Full guide: How to Finance a Rental Property in an LLC

640 is where our program starts, so below it the answer is usually no on DSCR specifically. That does not mean no loan. A bridge or fix and flip loan underwrites the asset and the exit, where credit is a pricing input rather than a gate, and can be the way to buy now and refinance into DSCR later once the score recovers. Full guide: What Credit Score Do You Need for a DSCR Loan?

Both. On long-term rental paper credit affects your rate and your maximum leverage, so a stronger score can move you closer to the 80% LTV ceiling while a weaker one pulls leverage down. That is why checking the score before you go under contract matters: it changes the cash you need, not only the payment. Full guide: What Credit Score Do You Need for a DSCR Loan?

Most lenders look for around 660 to 680; USA Mortgage lends from 640. A higher score earns a better rate and more leverage; a lower score can sometimes be offset with a larger down payment. Full guide: What Credit Score Do You Need for a DSCR Loan?

No. A DSCR loan qualifies on the property's rent versus its payment, so there is no personal income or tax-return test. Credit and the property carry the file. Full guide: What Credit Score Do You Need for a DSCR Loan?

It is harder and pricier, but possible with a strong property and a larger down payment. The lower the credit, the more the deal has to carry. Full guide: What Credit Score Do You Need for a DSCR Loan?

Personal debt-to-income, not deal flow. Conventional financing counts every mortgage against you personally, so the fifth purchase is harder than the first even when it is a better deal. DSCR breaks that ceiling by qualifying on the property's rent instead, with no personal income test, which is why it is the usual next step. Full guide: How to Scale a Rental Portfolio

Concentrating volume with a lender who knows your market and your file speeds up every deal after the first. A lender running fix and flip, DSCR and portfolio programs can also carry you through the acquire, stabilize, refinance and consolidate cycle without you re-explaining your business at every stage. Full guide: How to Scale a Rental Portfolio

By moving to business-purpose loans like DSCR and portfolio loans, which qualify on the properties rather than counting against conventional property limits or your debt-to-income ratio. Full guide: How to Scale a Rental Portfolio

The BRRRR method, recycling the same capital by refinancing it back out after each deal, combined with DSCR loans that have no property-count cap. Full guide: How to Scale a Rental Portfolio

Most investors do, for liability separation and clean books, and because DSCR and portfolio loans are built to close in an entity's name. Full guide: How to Scale a Rental Portfolio

Plan on 20%, since our DSCR and conventional investment programs both cap at 80% LTV. That cap applies to the new total loan, so it sets your ceiling directly: a property worth $500K supports a new loan up to $400K, and what you receive is whatever remains after paying off the existing loan and closing costs. Full guide: Cash-Out Refinance on an Investment Property

640 on our DSCR program, 580 on conventional investment. Credit tends to matter more on a cash-out than on a purchase, because you are increasing the loan against a property you already own. It affects both your rate and your maximum leverage, so the score you bring changes how much you can pull out, not only what you pay for it. Full guide: Cash-Out Refinance on an Investment Property

Not if you use a DSCR loan. It qualifies on the property's rent against its payment, so there are no tax returns, W-2s or pay stubs. We will want bank statements or proof of reserves and a current lease or rent roll. A conventional cash-out is fully documented, which is the trade you make for the lower rate. Full guide: Cash-Out Refinance on an Investment Property

Yes. A DSCR cash-out refinance qualifies on the property's rent, so you can convert equity to cash without a personal income test. Full guide: Cash-Out Refinance on an Investment Property

It depends on the property's value, the lender's loan-to-value limit, and whether the rent covers the new payment. Stronger value and rent let you pull more. Full guide: Cash-Out Refinance on an Investment Property

Common uses are the refinance leg of a BRRRR deal, pulling equity to fund the next purchase, or replacing a bridge loan with long-term debt. Full guide: Cash-Out Refinance on an Investment Property

Because the exit repays the principal, not the monthly payment. On a 6 month flip or a bridge, amortizing would raise the payment while barely reducing the balance. Interest-only keeps the carry as low as the structure allows so more of your cash stays in the project. Our DSCR program also offers an interest-only option, priced from 5.50% IO. Full guide: What Is Interest-Only Financing for Investors?

On a short hold, no, and that is the point. You never intended to amortize a loan you are repaying in months. On long-term rental paper the trade is real: interest-only improves monthly cash flow and builds no equity, so it suits an investor optimizing for cash flow or a planned refinance, and suits a long hold-to-payoff plan less well. Full guide: What Is Interest-Only Financing for Investors?

You pay only the interest for a set period, with no principal, which lowers the payment. The principal is repaid later at sale, refinance, or when the loan starts amortizing. Full guide: What Is Interest-Only Financing for Investors?

Lower payments mean higher cash flow on rentals (and a better DSCR) and lower carrying cost on short-term flip or bridge deals. Full guide: What Is Interest-Only Financing for Investors?

It boosts cash flow but builds no equity through principal during the interest-only period. It suits short holds best; for long holds, compare it to an amortizing option. Full guide: What Is Interest-Only Financing for Investors?

Gross rent against the full payment, and the full payment is where people go wrong. The denominator is PITIA: principal, interest, taxes, insurance and any HOA. Leaving out taxes and insurance produces a ratio that looks fine and does not survive underwriting. Use the actual escrowed figures, not an estimate, once you have them. Full guide: How to Calculate DSCR (With Examples)

We lend with a DSCR as low as 0.75, so falling under 1.00 is not automatically a decline. Below 1.00 the rent does not fully cover the payment and the file needs support elsewhere, usually lower leverage or a stronger credit profile. The levers are putting more down, buying at a better basis, or improving the rent. Full guide: How to Calculate DSCR (With Examples)

DSCR = monthly rent divided by the monthly payment (PITIA: principal, interest, taxes, insurance, and association dues). A DSCR of 1.00 means the rent exactly covers the payment. Full guide: How to Calculate DSCR (With Examples)

1.00 is the common floor (breakeven). Above that is positive cash flow; 1.20 or higher gives comfortable cushion and better loan terms. Full guide: How to Calculate DSCR (With Examples)

Increase rent, or lower the payment with a larger down payment or a longer term or interest-only structure. Both raise the ratio. Full guide: How to Calculate DSCR (With Examples)

Our DSCR program offers flexible prepay structures, so it is a term you choose rather than one imposed on you. Prepay and rate trade against each other: accepting a longer penalty usually buys a lower rate. The right structure depends on how long you actually intend to hold, so decide the hold first and price the prepay against it. Full guide: Prepayment Penalties on DSCR Loans

You pay it, so price it into the sale before you list rather than discovering it at closing. This is the most common way a prepay term surprises an investor: a property bought as a long hold sells in year two for a good reason, and the penalty was never in the model. If a sale is even plausible, choose the structure that reflects it. Full guide: Prepayment Penalties on DSCR Loans

Most do, because they are priced as long-term holds. The usual shape is a step-down over three to five years. Some programs offer a penalty-free option in exchange for a higher rate, which can be worth it if you expect to sell early. Full guide: Prepayment Penalties on DSCR Loans

It is a step-down schedule. You pay 5% of the balance if you pay the loan off in year one, 4% in year two, 3% in year three, and so on, with no penalty after year five. Full guide: Prepayment Penalties on DSCR Loans

It depends on where rates have moved. Yield maintenance pays the lender the value of the interest they lose, so it gets costlier when rates have fallen since you closed and can be close to nothing when they have risen. A step-down is predictable; yield maintenance is not. Full guide: Prepayment Penalties on DSCR Loans

Not the way there is on conventional financing, which is usually why investors move across. DSCR is business-purpose lending underwritten property by property, so the constraint becomes each deal's own numbers rather than a count of financed properties. That is the specific wall the ten-property limit creates and the specific reason it stops mattering. Full guide: The Ten-Financed-Property Limit and What Comes Next

Look at consolidating rather than adding more separate loans. Our portfolio program starts at 5 or more properties with loan amounts from $500K, putting them under one payment with individual property release so you can still sell one without unwinding everything. Past ten doors, the admin load is usually the real problem, not the financing. Full guide: The Ten-Financed-Property Limit and What Comes Next

It counts financed properties, not owned ones. A rental you own free and clear does not consume a slot. Your primary residence, if mortgaged, usually does, which catches people out when they count only rentals. Full guide: The Ten-Financed-Property Limit and What Comes Next

For most investors, a DSCR loan. It qualifies on the property's rent rather than your returns and is not bound by the same agency count. You typically accept a higher rate in exchange for the constraint disappearing. Full guide: The Ten-Financed-Property Limit and What Comes Next

Not on its own. Entity ownership changes the lending conversation but does not by itself clear a personal financed-property count, and transferring a mortgaged property has its own consequences. Consolidating into a portfolio loan is usually the more direct route. Full guide: The Ten-Financed-Property Limit and What Comes Next

It depends on the program and on which value is being used, so confirm the rule for your specific file rather than planning around a general number. The distinction that matters most is whether the lender will use current appraised value or your original purchase price. That single question decides whether a BRRRR refinance returns your capital or leaves it in the deal. Full guide: Seasoning: How Long You Must Own Before You Refinance

Usually the practical gate is a completed rehab and a signed lease, not the calendar. A DSCR loan qualifies on the property's rent against its payment, so it needs a rent figure that underwriting can rely on. Get the lease signed and the work finished, and ask about the value rule before you buy rather than at refinance. Full guide: Seasoning: How Long You Must Own Before You Refinance

A required waiting period before a lender will lend against something. Title seasoning is how long you have owned the property; value seasoning is how long a new, higher value must exist before it can be used. They are different clocks. Full guide: Seasoning: How Long You Must Own Before You Refinance

Only where value seasoning applies. If a program lends against current appraised value without a waiting period, BRRRR works as intended. Where it does not, your capital stays in the deal until the clock runs, so confirm the rule before you buy. Full guide: Seasoning: How Long You Must Own Before You Refinance

Get it leased and keep the rehab documented. A signed lease evidences the new value and is what a DSCR loan qualifies on anyway. Invoices and permits support the appraisal. Neither overrides a program rule, but both strengthen the file. Full guide: Seasoning: How Long You Must Own Before You Refinance

Cash-on-cash, because it measures what your money actually earns rather than what the property earns. Cap rate describes the asset and ignores your financing, which is fine for comparing buildings and useless for comparing your options. Once you have leverage in the deal, the return on your own cash is the number that decides anything. Full guide: Which Return Metric Should Drive Your Buy

Because they measure the same thing from opposite sides. DSCR asks whether rent covers the payment, which is the lender's downside question. Cash flow asks what is left afterwards, which is yours. A property at 1.0 DSCR breaks even on paper and puts nothing in your pocket, which is exactly why lenders want a cushion above it. Full guide: Which Return Metric Should Drive Your Buy

No. Cap rate excludes financing entirely, which makes it a good comparison tool and a poor decision tool. Two investors buying the same building at the same cap rate can have very different outcomes depending on their leverage and cost of capital. Full guide: Which Return Metric Should Drive Your Buy

Not on its own. Cash-on-cash rises as leverage rises, because you are putting less of your own money in. A high figure on thin debt coverage is a deal with no margin for a vacancy. Check DSCR alongside it. Full guide: Which Return Metric Should Drive Your Buy

DSCR, because it measures whether the property covers its own debt service. It is a durability metric rather than a return metric, and it is what a DSCR loan qualifies on - our program starts from 0.75. Full guide: Which Return Metric Should Drive Your Buy

We fund new construction up to 70% of value and up to 85% of total cost (land plus build), in most states, on loans up to $5M. Experienced builders reach the higher end of leverage. We finance both the lot and the vertical construction within those caps.

Yes. Lot acquisition is funded as part of your loan-to-cost. If you already own the lot, that equity can serve as your down payment, which often lets us fund most or all of the build cost.

Construction funds are released in draws as milestones are completed and verified, not handed over at closing. You submit your budget and scope of work up front, complete a phase, request a draw, and we release that portion after inspection. You pay interest on funds as they are drawn.

Our construction pricing starts around 10%, interest-only, on terms of 12 to 24 months. Market ground-up rates generally run 9% to 12% with 1 to 3 points. Your pricing and leverage depend on your build experience and the strength of the project.

We consider builders at all levels, though a track record helps your leverage and rate. A first-time builder should expect to bring a strong general contractor, a detailed budget, and typically a larger equity contribution. A well-documented project goes a long way.

The lot cost or current value, your construction budget and scope of work, the projected after-built value, and your build experience. With those we can size the loan against both cost and completed value and send you terms.

Up to 70% LTV or 85% LTC, on loans up to $5M. LTC is usually the binding constraint because it measures against total cost rather than finished value. Terms run 12 to 24 months from 10.00%, with funds released per the build schedule rather than at closing. Full guide: How Ground-Up Construction Loans Work

It carries real weight on a ground-up file, more than on any other program. A vertical build has more that can go wrong than a cosmetic rehab, so a lender looks hard at whether you or your general contractor have delivered comparable projects. A first-time builder with an experienced, licensed GC and a realistic budget is a very different file from one without. Full guide: How Ground-Up Construction Loans Work

Raise it early, well before maturity. Terms run 12 to 24 months, and if the schedule is slipping the useful conversation happens at month nine, not month twenty-three. Depending on progress and the deal an extension may be possible, case by case and never guaranteed. Permits and inspections are the usual cause, and both are visible long before the deadline. Full guide: How Ground-Up Construction Loans Work

A draw is a scheduled release of loan funds tied to a completed and inspected stage of construction, such as foundation or framing. You pay interest only on funds drawn so far. Full guide: How Ground-Up Construction Loans Work

LTC (loan-to-cost) sizes the loan against total project cost during the build. LTV (loan-to-value) measures the loan against the finished or as-is value. Construction loans lead with LTC. Full guide: How Ground-Up Construction Loans Work

Yes, with a sound budget, permits, and a realistic plan, though experienced builders typically qualify for higher leverage and better pricing. Full guide: How Ground-Up Construction Loans Work

Up to 70% LTV or 85% LTC on our ground-up program, with loan amounts up to $5M. LTC is the one that usually binds, because it measures against total cost rather than finished value. Terms run 12 to 24 months from 10.00%, and funds release per the build schedule rather than in a lump sum at closing. Full guide: What Is a Draw Schedule on a Construction Loan?

Draws are reimbursed as work is completed and inspected, not in advance. That timing is what surprises first-time builders: you or your contractor carry the cost of each phase before it is reimbursed. Build that float into your budget and your contractor agreement. A slow draw is far more often a paperwork or inspection gap than a lender decision. Full guide: What Is a Draw Schedule on a Construction Loan?

Tell us before you spend it, not after. A construction loan is sized to a specific budget and schedule, so an overrun mid-build has to be re-underwritten against remaining contingency and the finished value. The earlier that conversation happens the more options exist. Coming to a lender after the money is spent removes most of them. Full guide: What Is a Draw Schedule on a Construction Loan?

Funds release in stages tied to completed, inspected milestones. You pay interest only on the amount drawn so far, and you typically fund each stage before reimbursement. Full guide: What Is a Draw Schedule on a Construction Loan?

It varies, but draws usually map to major milestones such as foundation, framing, roof, mechanicals, and finish, often a handful across the project. Full guide: What Is a Draw Schedule on a Construction Loan?

No. You pay interest only on funds that have been drawn, which keeps early-stage carrying costs lower. Full guide: What Is a Draw Schedule on a Construction Loan?

It depends on whether you are touching the foundation and the frame or working inside an existing envelope. A rehab budget on a fix and flip loan funds up to 100% of rehab, capped to ARV. An addition that requires structural permits and a real draw schedule is closer to ground-up work, financed up to 70% LTV / 85% LTC over 12 to 24 months. Describe the scope to the lender before you assume the category. Full guide: New Construction Loan vs Renovation Loan: What's the Difference?

Yes, and the reason is experience rather than credit. There is no existing structure to fall back on, so the lender is underwriting your ability to finish. Experienced builders can access higher leverage on cost, which is the clearest place on the site where a track record converts directly into money. Full guide: New Construction Loan vs Renovation Loan: What's the Difference?

A construction loan funds building a new structure from the ground up and is sized on loan-to-cost. A renovation loan funds improving an existing property and is usually paired with purchase leverage and capped against ARV. Full guide: New Construction Loan vs Renovation Loan: What's the Difference?

Yes. Both release funds in stages as work is completed and inspected, but construction follows build milestones while renovation follows the scope of work. Full guide: New Construction Loan vs Renovation Loan: What's the Difference?

A ground-up construction loan, since you are creating a new structure. Improving a standing building uses a renovation or fix and flip loan. Full guide: New Construction Loan vs Renovation Loan: What's the Difference?

Request against completed work and photograph it before you ask. Draws are released per the build schedule after inspection, so the delay is almost always a request submitted before the work was finished, not a slow lender. Sequence the schedule so a slow draw never sits in front of a trade you cannot reschedule. Full guide: Draw Inspections: Fees, Timing, and What Holds Up a Draw

Usually yes, which is why working capital matters as much as the loan amount. Draw financing reimburses completed work, so you carry each stage until the inspection clears. Budget the gap between paying a subcontractor and receiving the draw, because that gap, not the interest rate, is what strains most first builds. Full guide: Draw Inspections: Fees, Timing, and What Holds Up a Draw

The borrower pays, and it is normally deducted from the draw rather than invoiced separately. It is a third-party cost, not part of the lender's origination, so it looks broadly similar whoever funds the build. Full guide: Draw Inspections: Fees, Timing, and What Holds Up a Draw

Percentage of completion. They confirm the line items you billed for are finished to the stage claimed. They are not checking quality or code compliance - that is the municipal building inspector, a separate visit. Full guide: Draw Inspections: Fees, Timing, and What Holds Up a Draw

Almost always because the work found on site was behind the work billed. If you request 60% and the inspector verifies 45%, the draw funds at 45% and you cover the difference until the next release. Billing slightly behind actual progress avoids it. Full guide: Draw Inspections: Fees, Timing, and What Holds Up a Draw

Often yes, and your licence and track record work in your favour. Lenders look hard at builder experience on a ground-up file, so being the GC can strengthen it. What a lender will want is clarity on your builder profit inside the budget and how draws are handled when you are on both sides. Raise that structure up front rather than at underwriting. Full guide: Financing for Contractors: Funding Your Own Builds

Not on our asset-based or bank statement programs. Fix and flip, bridge and construction loans qualify on the property and the deal. A bank statement loan qualifies on your deposits and starts at a 640 credit score with a down payment from 20%. Contractors with aggressive write-offs usually find one of these is the only realistic path. Full guide: Financing for Contractors: Funding Your Own Builds

Have the financing set before you need it, not after you win the work. A proof-of-funds letter costs nothing and needs no hard credit pull to start, and it makes you credible on an offer. Fix and flip and bridge files fund in as few as 5 to 7 days once title and insurance come together, so the constraint is almost never the lender. Full guide: Financing for Contractors: Funding Your Own Builds

Often yes, and licensed experience helps your file rather than hurting it. Expect the budget and any GC fee to your own company to be reviewed closely, and disclose the relationship up front. Requirements vary by program and are set in underwriting. Full guide: Financing for Contractors: Funding Your Own Builds

No. Draw budgets fund materials and paid subcontractors, against verified completion. Your own labor builds real equity in the finished value, but it does not draw against the loan, so plan your cash accordingly. Full guide: Financing for Contractors: Funding Your Own Builds

That is the normal contractor profile, and it is what bank statement and no-doc programs are built for. On a business-purpose build, the project and your track record usually carry more weight than the return does. Full guide: Financing for Contractors: Funding Your Own Builds

No. Land or acquisition funds release at closing; construction funds release in draws. Each draw follows completed and inspected work, on the schedule set at underwriting. Investors who budget as though the full amount arrives up front run into a cash gap in the first phase, which is the most common avoidable problem on a build. Full guide: Construction Loan Disbursement: How the Money Reaches You

You or your contractor do, and then the draw reimburses it. That float is a real line in your budget, not an administrative detail. Agree explicitly with your contractor who carries each phase and for how long, before work starts. A contractor expecting payment on delivery and a lender reimbursing on inspection is a conflict best resolved on paper. Full guide: Construction Loan Disbursement: How the Money Reaches You

Sometimes, and it is worth asking early rather than working around it. The schedule is set at underwriting against a specific budget and scope. A genuine sequencing change, long-lead materials or a trade rescheduled, is a normal conversation. What does not work is drawing ahead of completed work, because the inspection is what releases the money. Full guide: Construction Loan Disbursement: How the Money Reaches You

No. You receive the acquisition or land portion at closing; the construction portion is released in draws as work is completed and verified. The commitment is the full amount, but the cash arrives in stages. Full guide: Construction Loan Disbursement: How the Money Reaches You

It depends on the inspection and lien release cycle: request, inspect, report, collect releases, disburse. Each step is real calendar time and it repeats every draw, so plan working capital for at least one full cycle. Full guide: Construction Loan Disbursement: How the Money Reaches You

A percentage of each draw held back until the project is complete and signed off. It protects against a job abandoned near the end. Budget for it, because that money is unavailable mid-build even on work that is finished. Full guide: Construction Loan Disbursement: How the Money Reaches You

Bridge capital is for repositioning or stabilizing a commercial property before permanent financing: value-add, lease-up, a partner buyout, or pulling equity out through a cash-out. We lend across property types on terms up to 24 to 36 months, with loans up to $10M.

Our commercial bridge pricing starts around 9%, interest-only, up to roughly 75% loan-to-value, on terms up to 24 to 36 months. Published bridge pricing generally runs 8% to 12% with 1 to 3 points. Final terms depend on the asset, the business plan, and sponsor strength.

Commercial deals usually close in 2 to 4 weeks. They take a little longer than residential because of the appraisal, the rent roll and operating-statement review, and any third-party reports. We move as fast as the diligence allows and keep one point of contact on your file.

Not necessarily at closing. Bridge loans are often underwritten interest-only to the as-stabilized business plan rather than a minimum in-place DSCR, since the property is being repositioned. We do want to see a credible path to stabilization and enough in-place income or reserves to carry the loan.

Typically the purchase contract or current debt, a rent roll and trailing-12-month operating statement, your business plan and renovation budget, and sponsor financials. Larger assets may also need a property condition report and an environmental review. We will give you a clear checklist up front.

Most bridge loans are recourse with a personal guarantee, while lower-leverage non-recourse can be possible on stronger assets. Cash-out is available when there is equity to support it. We structure recourse and leverage around the specific deal.

There is no single cutoff, because a bridge loan underwrites the asset and the exit rather than your credit file. Credit affects your rate and your leverage, and weaker credit can often be offset with a larger down payment or lower leverage. What matters far more is whether the property has real equity and whether your exit, a sale or a refinance, is credible on the timeline you are proposing. Full guide: What Is a Bridge Loan in Real Estate?

On our CRE bridge program, up to 75% LTV, on loans up to $10M. Residential bridge sizing depends on the property and the plan. The number that decides most bridge files is not the leverage though, it is the exit: a lender will stretch further on a deal with a signed sale contract or a clearly financeable refinance than on one where the plan is still forming. Full guide: What Is a Bridge Loan in Real Estate?

Tell us early. That is not a formality, it is the single most useful thing a borrower can do. Bridge terms run up to 24 to 36 months on our commercial program, and if a project is trending long the options narrow as maturity approaches. Depending on your progress and the deal, an extension may be possible, case by case and never guaranteed. The worst version is the call that comes after the maturity date. Full guide: What Is a Bridge Loan in Real Estate?

Bridge loans are short-term, commonly 12 to 36 months, and are paid off when the property sells or refinances into permanent financing. Full guide: What Is a Bridge Loan in Real Estate?

Yes. A common use of a commercial bridge loan is a cash-out against existing equity to fund another project before permanent financing is in place. Full guide: What Is a Bridge Loan in Real Estate?

They overlap. Bridge describes the purpose (covering a gap), while hard money describes the asset-based, fast-funding style. Most bridge loans from a private lender are hard money loans. Full guide: What Is a Bridge Loan in Real Estate?

Only if the asset is already stabilized, which is the entire dividing line. Permanent lenders underwrite in-place income; bridge lenders underwrite the plan to create it. A half-leased building does not qualify for permanent debt at any price. Bridge exists to get it to the point where it does. Full guide: Commercial Bridge vs Permanent Financing

Yes, and the comparison that matters is against not owning the asset. Bridge is priced from 9.00%*, interest-only, up to 75% LTV, against permanent debt at materially lower cost. You are buying time to execute a repositioning that permanent debt would not have funded. Price it against the plan's upside, not against a loan you could not have gotten. Full guide: Commercial Bridge vs Permanent Financing

A bridge loan is short-term, fast, and flexible for acquiring or repositioning a property. Permanent financing is long-term and lower-cost, for stabilized property held for the long run. Full guide: Commercial Bridge vs Permanent Financing

Yes, that is the standard path. You use a bridge to acquire and stabilize, then refinance into long-term permanent debt at a lower rate. Full guide: Commercial Bridge vs Permanent Financing

Permanent lenders require stabilized, documented income and close slower. If a property is not yet stabilized or you need speed, a bridge loan fills the gap. Full guide: Commercial Bridge vs Permanent Financing

One that is already in motion, not one that is available in principle. Sale, refinance into permanent debt, or a capital event with a date on it. We place permanent commercial debt in house and refinance borrowers out of the bridge once the asset is stabilized, which is why the exit is discussed at origination rather than at maturity. Full guide: Bridge Loan Exit Strategies: How to Pay Off Short-Term Debt

Say so early. Terms run up to 24 to 36 months, and the useful conversation happens months before maturity, not weeks. Bridge lenders underwrite to an exit, so a delayed lease-up or a slower sale is a known category of problem with known responses. What removes those responses is finding out late. Full guide: Bridge Loan Exit Strategies: How to Pay Off Short-Term Debt

It is the plan for how you repay the bridge loan at maturity, usually a refinance into long-term debt, a sale of the property, or stabilizing the asset so it qualifies for permanent financing. Full guide: Bridge Loan Exit Strategies: How to Pay Off Short-Term Debt

Bridge terms range from about 6 months on a flip to 24 to 36 months on commercial bridge, and extensions are considered case by case, not guaranteed. Tell us early so we can discuss options rather than reach the maturity date by surprise. Full guide: Bridge Loan Exit Strategies: How to Pay Off Short-Term Debt

Yes. Refinancing a stabilized rental from a bridge loan into a long-term DSCR loan is one of the most common exits, and it is the backbone of the BRRRR method. Full guide: Bridge Loan Exit Strategies: How to Pay Off Short-Term Debt

It depends entirely on the program, and the published caps are the place to start. Fix and flip reaches 90% of purchase and 100% of rehab, capped to ARV. Ground-up construction reaches 70% LTV or 85% LTC. DSCR and conventional investment reach 80% LTV, and CRE bridge 75% LTV. Your credit, experience and the property move you within those caps. Full guide: What Is an Advance Rate?

Because a cap is a ceiling, not an entitlement. The usual reasons are a lower appraisal or ARV than expected, thin experience on that property type, weaker credit, or a rehab budget the finished value will not support. The cap that binds is whichever comes in lowest, which on a value-add deal is very often the ARV constraint rather than the purchase-price one. Full guide: What Is an Advance Rate?

Often yes, on asset-based programs. Because these loans underwrite the property and the deal rather than a personal income file, more equity meaningfully reduces the lender's risk and can bring an otherwise marginal file back into range. It works far less well on DSCR, where credit is a stated gate from 640, and not at all on documented conventional financing. Full guide: What Is an Advance Rate?

Effectively yes, but stated from the lender's perspective. The important difference is that advance rate is often quoted without naming the base, and the base - purchase price, appraised value, cost, or after-repair value - changes the money more than the percentage does. Full guide: What Is an Advance Rate?

Because they are advancing against different values. 80% of purchase price, 80% of appraised value, and 80% of the lower of the two are three different loans. Always ask which base applies and who determines that value. Full guide: What Is an Advance Rate?

Anything that makes the asset easier to sell. Property type, condition, market liquidity, and borrower experience all move it. A lender advances more against collateral they are confident they could exit quickly if they had to. Full guide: What Is an Advance Rate?

Because it decides who gets paid, and in what order, if the loan goes bad. A first-position lender is repaid before anyone else from a foreclosure sale. A junior lienholder is paid only from what is left, and can be wiped out entirely. That risk is the whole reason junior financing prices higher and caps leverage lower than a first. Full guide: Lien Position: First, Second, and Why It Changes Your Rate

Check your first mortgage documents before you assume so. A first mortgage may restrict junior liens: the standard 1-4 Family Rider, which Fannie Mae requires on the one- to four-unit investment loans it buys and which some other lenders also use, bars one without the first lender's written permission. Investors discover this at recording, which is the worst possible moment. Read the deed of trust and any riders, or have your attorney read them, first (Fannie Mae Selling Guide B8-4-01, accessed 2026-10-06). Full guide: Lien Position: First, Second, and Why It Changes Your Rate

Yes, and materially. The junior lender is behind you in line for repayment and can lose its entire position in a senior foreclosure, so it prices for that and caps leverage lower. That trade can still be worth it when the alternative is refinancing a first you would rather keep, which is the calculation to run before assuming a refinance is cheaper overall. Full guide: Lien Position: First, Second, and Why It Changes Your Rate

The lender in first position is paid in full before any junior lien receives anything if the property is sold or foreclosed. It is the senior claim on the collateral, which is why most short-term lending requires it. Full guide: Lien Position: First, Second, and Why It Changes Your Rate

Because the second lender absorbs the shortfall in any scenario where the sale does not cover the total debt. They carry loss exposure the first does not, and that risk is priced into the rate and leverage. Full guide: Lien Position: First, Second, and Why It Changes Your Rate

When your existing first is well below market and you do not want to disturb it, when the need is short-term, or when a prepayment penalty makes a full refinance costly. Run the total cost of both routes before deciding. Full guide: Lien Position: First, Second, and Why It Changes Your Rate

Transactional funding is short-term capital that funds the A-to-B leg of a back-to-back (double) closing, so you can resell to your end buyer (B-to-C) the same day. It is built for wholesalers and assignment deals where you need to take title briefly without using your own cash.

It is priced as a flat fee rather than an interest rate, since the money is only out for a day or two. Market pricing generally runs about 1% to 3% of the amount funded, with a dollar minimum on small deals. You also cover the normal double-close costs such as title, escrow, and recording.

We can fund up to 100% of your purchase price on the A-to-B closing, so you bring no money to the table. The loan is repaid directly from the proceeds of your simultaneous B-to-C sale.

No. Transactional funding requires no credit check and no appraisal. Approval rests on a verified, ready-to-close end buyer rather than your personal finances, which is why it can fund same-day.

Your executed A-to-B and B-to-C contracts, proof of the end buyer's funds, and a title or escrow company that allows back-to-back closings. With those in hand we can fund the same day.

Very short, usually a matter of days. It is designed to be repaid out of the same-day or next-day resale, not held like a normal loan.

Neither. It covers up to 100% of the purchase price on the A-to-B leg, priced as a flat fee rather than a rate, with no credit check and no appraisal. That is possible because the money is only in the deal for the length of the closing. What it does require is an end buyer who is funded and papered. Full guide: What Is Transactional Funding? (Double Closings for Wholesalers)

That is the risk the product does not cover, and the reason to be certain before you use it. The structure assumes both legs close together. If the B-to-C does not fund, you hold a property financed at 100% of purchase with no long-term loan behind it. When the resale is not yet firm, a hard money loan underwritten to a longer horizon is the safer instrument. Full guide: What Is Transactional Funding? (Double Closings for Wholesalers)

Double closing is a normal structure, but several states changed their wholesaler rules recently and one sets a statutory waiting period. Newer statutes add written disclosure duties, and at least one determines when the first leg may close at all. Anything written before 2025 may be out of date. Confirm the current rule with a real estate attorney in your state. Full guide: What Is Transactional Funding? (Double Closings for Wholesalers)

An assignment transfers your purchase contract to the end buyer for a fee. Transactional funding instead funds an actual purchase and resale (a double close), useful when the end buyer's lender will not allow an assignment. Full guide: What Is Transactional Funding? (Double Closings for Wholesalers)

Usually hours. The A-to-B and B-to-C closings happen back to back, often the same day, so the capital is repaid almost immediately from the end buyer's funds. Full guide: What Is Transactional Funding? (Double Closings for Wholesalers)

Credit matters far less than on a normal loan because the financing is repaid the same day from the resale. The deal and the end buyer drive the approval. Full guide: What Is Transactional Funding? (Double Closings for Wholesalers)

Hard money, not transactional funding. Transactional funding assumes both legs close together and covers up to 100% of purchase only for the length of that closing. Without a funded, papered end buyer you would hold a fully financed property with no long-term loan behind it. A hard money loan is underwritten to a longer horizon and is the safer instrument. Full guide: Transactional Funding vs Hard Money: Which One Fits Your Deal?

It costs less in absolute terms because the money is in the deal for hours rather than months. It is priced as a flat fee rather than a rate, with no credit check and no appraisal. That is not a discount though, it is a different product: it buys you a same-day close you have already sold, not time to execute a plan. Full guide: Transactional Funding vs Hard Money: Which One Fits Your Deal?

No. Transactional funding covers the A-to-B leg of a same-day double closing and is repaid within hours. Hard money is a short-term loan, often months, used to buy and renovate a property. Full guide: Transactional Funding vs Hard Money: Which One Fits Your Deal?

Transactional funding is priced as a flat fee, usually 1% to 3% of the amount funded, because it is outstanding for a day or two. Hard money charges interest plus points over the months you hold the loan. Full guide: Transactional Funding vs Hard Money: Which One Fits Your Deal?

When you are doing a true back-to-back (double) closing and your title company requires your own funds on the A-to-B side before the B-to-C sale funds you. Full guide: Transactional Funding vs Hard Money: Which One Fits Your Deal?

No. Transactional funding covers up to 100% of the A-to-B purchase price. It is priced as a flat fee rather than a rate, with no credit check and no appraisal, because the money is in the deal only for the length of the closing. What it does require is a funded, papered end buyer. The structure assumes both legs close together. Full guide: Double Closing Explained: How Wholesalers Close A-to-B-to-C

It is a normal transaction structure, but several states changed their rules recently and the answer is genuinely state-specific. Newer wholesaler statutes add written disclosure duties, and in at least one state a statutory cancellation window determines when the first leg can close at all. Do not rely on an article written before 2025. Confirm the current rule with a real estate attorney in your state before you build a process on it. Full guide: Double Closing Explained: How Wholesalers Close A-to-B-to-C

Yes, and that is the honest trade against an assignment. Two transactions mean two deeds recorded and two sets of title and settlement charges, and in some states a transfer or documentary tax on each. An assignment avoids all of that. What you are buying with the second closing is privacy: your purchase price stays off the end buyer's settlement statement. Full guide: Double Closing Explained: How Wholesalers Close A-to-B-to-C

A double closing is two back-to-back transactions on the same day: you buy from the seller (A-to-B), then immediately resell to your end buyer (B-to-C). Transactional funding covers the first leg. Full guide: Double Closing Explained: How Wholesalers Close A-to-B-to-C

When properly disclosed, double closings are a recognized, widely used way to complete a wholesale deal. Both transactions must be disclosed to the title or escrow company and to any end-buyer lender, and state wholesaling and licensing rules vary, with some states restricting same-day resales or pass-through funding, so confirm the structure with your title company and local counsel. Full guide: Double Closing Explained: How Wholesalers Close A-to-B-to-C

An assignment transfers your purchase contract to the end buyer for a fee and never puts the property in your name. A double closing actually buys and resells the property, which keeps your spread off the end buyer's settlement statement while both transactions stay fully disclosed to title and any end-buyer lender. Full guide: Double Closing Explained: How Wholesalers Close A-to-B-to-C

A bank statement loan qualifies you on 12 to 24 months of business or personal bank deposits instead of tax returns, which suits self-employed borrowers whose returns understate their real income. A no-doc (or no-ratio) loan goes further and leans on the property and your reserves rather than any income calculation. Both are business-purpose loans for investment property, not consumer mortgages.

Correct. We do not ask for tax returns, W-2s, or pay stubs on these programs. We verify the deal, your credit, and either your bank-statement cash flow or your reserves, depending on the structure. It is built so write-offs and a complex return do not work against a strong borrower.

Self-employed investors, business owners, and 1099 or commission earners whose write-offs shrink their taxable income. If your bank deposits tell a stronger story than your tax return, this is usually the right fit.

We lend from a credit score of 640, with the best terms going to stronger credit, and a down payment starting around 20%. Across the market these programs often want 660 or higher and 20% to 30% down. Stronger credit and more equity improve both your rate and your leverage.

Pricing is higher than a fully documented conventional loan because the lender takes on more uncertainty, and it varies with your credit, leverage, and the structure. We offer both short-term and long-term options, so we match the term to whether you are flipping, bridging, or holding.

Yes. These are business-purpose loans and routinely close in an LLC or other entity. Holding investment property in an entity is standard and often preferred.

Because for a self-employed investor the return is designed to show a low number, and conventional underwriting reads that number literally. Depreciation, equipment and legitimate write-offs are good tax planning and bad loan applications. Bank statements show the deposits the business actually receives, which is closer to what you can service debt with. Full guide: Bank Statement and No-Doc Loans for Self-Employed Investors

Generally yes, and the comparison is usually not against a conventional loan you could have had. The relevant alternative for most self-employed investors is no loan at all, or two years of restructuring their returns first. If your returns do support conventional financing, take it. If they do not, this is the tool. Full guide: Bank Statement and No-Doc Loans for Self-Employed Investors

A bank statement loan qualifies a self-employed borrower using 12 to 24 months of bank deposits to show real cash flow, instead of tax returns or W-2s. Full guide: Bank Statement and No-Doc Loans for Self-Employed Investors

Not literally. No-doc means no income documentation; the loan qualifies on the asset (value or rent). You will still verify identity, the entity, the property, and reserves. Full guide: Bank Statement and No-Doc Loans for Self-Employed Investors

Self-employed investors, business owners, and anyone whose tax returns understate their true income because of write-offs. Full guide: Bank Statement and No-Doc Loans for Self-Employed Investors

No tax returns and no W-2s, not no underwriting. A no-doc loan leans on the property and your reserves instead of your income documents, so appraisal, title, credit and liquidity all still happen. What disappears is the personal income file, not the diligence. Full guide: No-Doc Investment Property Loans: How They Work in 2026

An investor whose income is real but hard to document quickly. Business owners, 1099 earners and investors with heavy write-offs, in a personal name or an LLC. It is the wrong tool for someone with clean W-2 income who simply wants less paperwork, because they will pay for a flexibility they do not need. Full guide: No-Doc Investment Property Loans: How They Work in 2026

A no-doc (or no-ratio) loan is a business-purpose investment loan that qualifies on the property, your credit, and your reserves rather than any income documentation. There is no tax return or income calculation. Full guide: No-Doc Investment Property Loans: How They Work in 2026

Yes. No-doc lending is legal for business-purpose, non-owner-occupied property. The ability-to-repay rules that restrict no-doc consumer mortgages do not apply to business-purpose loans, which is why the loan's purpose and the property's occupancy must always be stated accurately. Full guide: No-Doc Investment Property Loans: How They Work in 2026

Programs commonly look for a credit score from about 640 to 680 depending on the lender (USA Mortgage's bank statement / no-doc program starts at 640, subject to underwriting) and a larger down payment than a documented loan, often 20% to 30%, with the best terms going to stronger credit and more equity. Full guide: No-Doc Investment Property Loans: How They Work in 2026

12 to 24 months, and which one depends on how steady the deposits look. A business with even monthly revenue can often qualify on 12; one with seasonal or lumpy income usually needs 24, because the longer window is what makes an uneven year legible. Ask which the lender wants before you start pulling statements. Full guide: Bank Statement Loan Requirements for Self-Employed Investors

From 640, with down payment from 20%. Loan amounts run $100K to $3M. The credit bar exists because the income documentation is lighter, so the other parts of the file carry more weight. Reserves matter here more than they do on a conventional loan. Full guide: Bank Statement Loan Requirements for Self-Employed Investors

They average your deposits over 12 to 24 months, often applying an expense factor to estimate net business income. Personal and business statements can both be used depending on the program. Full guide: Bank Statement Loan Requirements for Self-Employed Investors

Most programs require 12 to 24 months of business or personal bank statements. A longer, steadier deposit history generally supports better terms. Full guide: Bank Statement Loan Requirements for Self-Employed Investors

Many lenders want a score around 660 or higher; USA Mortgage's program starts at 640, subject to underwriting, with the best pricing above 700, plus a larger down payment, often 20% to 30%, than a fully documented loan. Full guide: Bank Statement Loan Requirements for Self-Employed Investors

It is standard, competitively priced financing for a non-owner-occupied investment property, the long-term loan you take when your file fits the conventional box. It usually carries a lower rate than a bridge or DSCR loan, in exchange for full documentation.

A conventional loan qualifies on your documented personal income and credit, while a DSCR loan qualifies on the property's rent. Conventional pricing is often lower if you can document your income and you are within the limit on financed properties; DSCR is easier to scale and skips the income docs. We compare both and put you in the one that fits.

Plan on roughly 20% to 25% down on an investment-property purchase, with the best pricing at lower leverage and higher credit. Cash-out refinances are typically capped a bit lower than purchases.

Conventional investment financing generally wants a credit score around 580 or higher, and your rate improves meaningfully as your score and reserves go up. We will tell you up front where your file lands.

Purchases, rate-and-term refinances, and cash-out refinances on non-owner-occupied 1-4 unit investment property. If you will live in the property, that is owner-occupied financing, which we refer to a trusted partner rather than originate here.

Because it is fully documented, expect to provide income verification, tax returns, bank statements, and the standard conventional paperwork. If that documentation is a hurdle, our DSCR and bank-statement programs are the no-tax-return alternatives.

A portfolio or blanket loan rolls several rental properties into one loan with a single monthly payment, instead of a separate mortgage on each property. It simplifies your financing, frees up capital, and lets you scale a rental portfolio without managing a stack of individual loans.

These structures usually make sense at around five or more properties, though we can look at smaller groups. The portfolio can be a mix of single-family rentals, small multifamily, and other income property.

Yes. Most blanket loans include a release provision, so you can sell an individual property and pay down the loan by that property's allocated amount while the rest stays in place. We set the release terms up front.

We underwrite the combined cash flow and overall leverage of the portfolio, similar to a DSCR loan but across the whole group. Pricing depends on the asset mix, the leverage, and your experience, and loan amounts typically start around $500K.

Usually not. Like our DSCR program, a blanket rental loan qualifies on the portfolio's cash flow rather than your personal income, so tax returns are generally not required. We will want to see the rent roll and operating history.

Yes. A common use of a blanket loan is to consolidate existing mortgages and pull cash out of the combined equity, giving you capital to acquire more property. Cash-out leverage is set against the portfolio's value and cash flow.

Our portfolio program starts at 5 or more properties, with loan amounts from $500K. Below that the consolidation rarely pays for its own closing costs. The better test is not the count anyway, it is how many separate payments, escrows and maturity dates you are tracking, and whether you have run into a limit on how many individual mortgages you can hold. Full guide: What Is a Blanket Loan?

Yes, if the loan has a release provision, and ours does. This is the question to ask before signing any blanket loan. Without individual property release, selling one house means refinancing everything, which quietly turns your portfolio into a single illiquid block. Confirm the release terms and any release price on every offer you compare. Full guide: What Is a Blanket Loan?

Mostly on the properties, with credit as a pricing input. A blanket loan underwrites the pool's combined income and value rather than your paycheck, and there is no personal income test. Credit affects your rate and your leverage rather than deciding the file. The payment consolidates into one payment across the pool. Full guide: What Is a Blanket Loan?

A single loan secured by multiple properties, with one payment, used by investors to finance or consolidate several rentals at once. Full guide: What Is a Blanket Loan?

A provision that lets you sell one property out of the group and pay down a portion of the loan without paying off or refinancing the entire blanket loan. Full guide: What Is a Blanket Loan?

Often yes. Both describe financing multiple properties under one loan. Terms vary by lender, but the idea is the same. Full guide: What Is a Blanket Loan?

Only if the loan has a release provision, so confirm it exists before you sign rather than before you list. Without one, selling a single property can require paying off or restructuring the whole facility. This is the most common surprise in blanket financing and it is entirely avoidable at the term sheet stage. Full guide: Blanket Loan vs Individual Mortgages: Which Scales Better?

Around five, which is where our portfolio program starts. Below that, the per-loan closing costs of individual mortgages are usually the smaller number. Above it, the case is less about cost than about administration: one payment, one maturity and one underwriting file instead of a dozen. Our portfolio loans run $500K to $50M. Full guide: Blanket Loan vs Individual Mortgages: Which Scales Better?

A blanket loan finances several properties under one loan and one monthly payment, while individual mortgages put a separate loan on each property. The blanket structure simplifies management as you scale. Full guide: Blanket Loan vs Individual Mortgages: Which Scales Better?

Yes. Most blanket loans include a release provision, so you can sell a single property and pay down the loan by that property's allocated amount while the rest stays in place. Full guide: Blanket Loan vs Individual Mortgages: Which Scales Better?

These structures usually make sense at around five or more properties, though smaller groups can sometimes qualify. The mix can include single-family rentals and small multifamily. Full guide: Blanket Loan vs Individual Mortgages: Which Scales Better?

It depends on whether you plan to sell any of them. One facility is simpler to run and usually cheaper to close than a dozen individual refinances. Individual loans keep each property independently sellable and financeable. If a sale is likely, the flexibility is often worth more than the administrative saving. Full guide: How to Refinance a Rental Portfolio Into One Loan

Not on a DSCR refinance, which qualifies on the properties' rent rather than personal income. That means no tax returns and no personal DTI test, which is why investors whose returns show heavy depreciation use it. It also means the properties have to carry themselves on paper, so occupancy and rent roll do the work your W-2 would have done. Full guide: How to Refinance a Rental Portfolio Into One Loan

Yes. A portfolio or blanket refinance consolidates several rental mortgages into a single loan with one payment, underwritten on the combined cash flow of the group. Full guide: How to Refinance a Rental Portfolio Into One Loan

Cash-out leverage is set against the portfolio's combined value and cash flow, typically a little lower than a purchase. The equity you free up can fund your next acquisition. Full guide: How to Refinance a Rental Portfolio Into One Loan

Usually not. Like a DSCR loan, a blanket rental refinance qualifies on the portfolio's cash flow rather than your personal income, so tax returns are generally not required. Full guide: How to Refinance a Rental Portfolio Into One Loan

A problem at one property is a problem for all of them. That is the whole trade. Pledging several properties against one loan buys leverage and simpler administration, and it removes the firewall that separate loans give you. It suits a stabilized portfolio with consistent performance and suits a set of unrelated speculative bets much less well. Full guide: Cross-Collateralization: Using One Property's Equity to Buy Another

Sometimes, and it is a new underwriting event rather than a paperwork change. Adding collateral means re-testing the whole facility, so treat it as its own transaction with its own timeline. If you expect to be buying steadily, raise that at the term sheet stage so the structure is built for it. Full guide: Cross-Collateralization: Using One Property's Equity to Buy Another

One loan secured by more than one property. You pledge equity in something you already own to support a new loan, instead of contributing that equity as cash. It is the same principle a blanket or portfolio loan uses across a whole pool. Full guide: Cross-Collateralization: Using One Property's Equity to Buy Another

You have tied two assets together. A default on the combined facility puts both properties at risk, including one that was performing fine independently. Selling also gets harder: releasing a property normally needs a paydown and lender consent. Full guide: Cross-Collateralization: Using One Property's Equity to Buy Another

It is faster and preserves the existing rate on the property you pledge, which matters if that rate is good. A cash-out refinance is slower and may trigger seasoning, but it keeps the assets independent. The trade is speed against separation. Full guide: Cross-Collateralization: Using One Property's Equity to Buy Another

Permanent (or perm) financing is long-term debt on a stabilized commercial property, the loan you move into once a building is leased up and performing. It replaces short-term bridge or construction debt with a longer fixed term and a lower rate.

We place permanent debt through agency multifamily programs (Fannie Mae and Freddie Mac), insurance companies, and other wholesale lenders. Because we shop multiple sources, we can match your asset to the program with the best long-term terms.

Stabilized multifamily of five units and up, plus mixed-use and other commercial assets with a solid operating history. Agency multifamily in particular looks for occupancy and cash flow that support long-term debt.

The bridge program is short-term capital to acquire or reposition a property; permanent financing is the long-term exit once it is stabilized. Many investors use both in sequence, bridging to stabilize and then refinancing into permanent debt. We can line up both.

Permanent commercial rates run well below bridge pricing and move with the agency and wholesale market, on long fixed terms. The exact rate depends on the asset, the program, and current conditions, and we will walk you through the options.

Plan on several weeks, since agency and wholesale permanent loans require full underwriting, third-party reports, and lender approval. We manage the placement and keep one point of contact on your file from quote to close.

In-place income the lender can underwrite without believing your projections. In practice that means occupancy and rents at market for the submarket, with leases in hand. Until the asset reaches that point it is a bridge deal, however good the plan is. Stabilization is the gate between the two kinds of debt. Full guide: Debt Yield, and What Stabilized Actually Means

Because debt yield ignores the interest rate and DSCR does not. DSCR can be rescued by cheap money or a long amortization; debt yield asks what the property's income is worth against the loan regardless of how it was financed. Lenders use it because it does not flatter a deal when rates are low. Full guide: Debt Yield, and What Stabilized Actually Means

NOI divided by the loan amount. $400,000 of NOI against a $5,000,000 loan is 8% debt yield. It deliberately excludes the interest rate, amortisation and cap rate, which is exactly why lenders rely on it. Full guide: Debt Yield, and What Stabilized Actually Means

Because DSCR can be flattered by a low rate or a long amortisation, and cap rate can be flattered by a hot market. Debt yield is immune to both. In frothy markets it often becomes the binding constraint on loan size. Full guide: Debt Yield, and What Stabilized Actually Means

Occupancy at or near market, real leases in place, an operating history that shows the income repeats, and capital works finished. A property with leases starting next quarter is not stabilized - it is a bridge deal with a plan. Full guide: Debt Yield, and What Stabilized Actually Means

The 7(a) is the flexible, all-purpose SBA loan: owner-occupied real estate, business acquisition, partner buyouts, equipment, and working capital under one note. The 504 is purpose-built for owner-occupied commercial real estate and heavy equipment, with a long-term fixed rate and a low down payment. We place both and match your scenario to the right one.

SBA loans go up to $5M, with larger total project sizes possible on the 504 since a bank funds part of the deal. Down payments are low, often around 10%, rising to 15% to 20% for startups or special-purpose properties. On the right deal we finance up to 90%.

Terms run up to 25 years for real estate, which keeps payments low. 7(a) rates are usually variable and tied to the Prime rate, while the 504 carries a long-term fixed rate on the CDC portion. Because we place your file across 20+ SBA lenders, we shop your scenario for the strongest terms.

Yes. SBA real estate loans require owner-occupancy, at least 51% of an existing building or 60% of new construction. That requirement is what separates SBA-eligible deals from pure investment property, which fits our other programs.

Yes. The SBA requires a personal guarantee from anyone who owns 20% or more of the business, and on real-estate deals the loan is also secured by the property. This is standard on every SBA loan, not a sign of a weak file, and it is part of why SBA financing offers low down payments and long terms. We will walk you through exactly what you are signing before you commit.

SBA loans are slower than our bridge products, typically 30 to 90 days, because of the documentation and approval process. The tradeoff is a much lower long-term cost. If you need speed now, we can bridge the deal and refinance into SBA later.

Generally two to three years of business and personal tax returns, business financials, a personal financial statement, and details on the property or business. We will tell you exactly what is needed and place your file with the best-fit lender in our network.

As little as 10%, since our SBA programs finance up to 90% of the project. That is the main reason owner-occupants choose SBA over conventional commercial financing, which typically wants far more equity. Loan amounts run $350K to $5M and up on terms up to 25 years, so both the entry cost and the payment are lower than a conventional CRE structure. Full guide: SBA 7(a) vs 504: Which Is Right for Owner-Occupied Real Estate?

Plan on 30 to 90 days. SBA files carry federal eligibility review on top of ordinary underwriting, and no lender can compress that away. If you are competing against a fast buyer for a property, that timeline is a real disadvantage, and a bridge loan to buy now with an SBA refinance later is sometimes the better structure. Full guide: SBA 7(a) vs 504: Which Is Right for Owner-Occupied Real Estate?

No. SBA real estate financing requires owner-occupied commercial property. Your business has to occupy the building, generally most of it. A property bought purely to lease out is an investment property and belongs in DSCR, conventional investment or CRE financing. This is the most common reason an SBA enquiry turns out not to fit. Full guide: SBA 7(a) vs 504: Which Is Right for Owner-Occupied Real Estate?

The 504 is built for fixed assets like owner-occupied real estate, combining a bank loan, a CDC loan, and roughly 10% down. The 7(a) is a flexible general-purpose loan that can also fund working capital and business acquisition. Full guide: SBA 7(a) vs 504: Which Is Right for Owner-Occupied Real Estate?

No. SBA 7(a) and 504 require the business to occupy the majority of the property. They finance owner-occupied real estate, not passive rentals. Full guide: SBA 7(a) vs 504: Which Is Right for Owner-Occupied Real Estate?

Typically around 10% for a standard owner-occupied purchase, though it can be higher for special-purpose properties or startups. Full guide: SBA 7(a) vs 504: Which Is Right for Owner-Occupied Real Estate?

Your operating business has to occupy the building, generally the majority of it. That is the threshold question on every 504 file, and it is where most enquiries fail. Partially leasing out the remainder is normally workable; buying a building your business does not occupy is not. If the property is purely an income asset, it belongs in CRE or DSCR financing instead. Full guide: SBA 504 Loans for Owner-Occupied Commercial Real Estate

As little as 10% down, since our SBA programs finance up to 90%. That leverage, on terms up to 25 years, is the reason owner-occupants use 504 rather than conventional commercial financing. The trade is the timeline: expect 30 to 90 days, because federal eligibility review sits on top of ordinary underwriting. Full guide: SBA 504 Loans for Owner-Occupied Commercial Real Estate

Often yes, if the occupancy and use tests are met. The same owner-occupancy requirement applies to a refinance as to a purchase. What varies is the eligible use of proceeds, which is set by federal program rules rather than by us, so the honest answer for your specific building comes from running it. Loan amounts run $350K to $5M and up. Full guide: SBA 504 Loans for Owner-Occupied Commercial Real Estate

Owner-occupied commercial real estate and heavy equipment. It is built for a business buying or building the property it operates from, not for pure investment real estate. Full guide: SBA 504 Loans for Owner-Occupied Commercial Real Estate

Often around 10%, rising to 15% to 20% for startups or special-purpose properties. A bank funds part of the deal and a CDC funds the long-term fixed-rate portion. Full guide: SBA 504 Loans for Owner-Occupied Commercial Real Estate

Your business must occupy at least 51% of an existing building or 60% of new construction. That owner-occupancy rule is what separates SBA-eligible deals from investment property. Full guide: SBA 504 Loans for Owner-Occupied Commercial Real Estate

As little as 10%, since our SBA programs finance up to 90% of the project on terms up to 25 years. That combination, low equity and long amortization, is the reason owner-occupants choose SBA over conventional commercial financing. Loan amounts run $350K to $5M and up. Full guide: SBA Loan Down Payment, Rates, and Terms Explained

Time and occupancy. Expect 30 to 90 days to close, because federal eligibility review sits on top of ordinary underwriting, and the property must be owner-occupied commercial real estate your business actually uses. If you need speed or the building is purely an income asset, SBA is the wrong tool no matter how good the terms look. Full guide: SBA Loan Down Payment, Rates, and Terms Explained

Often around 10%, rising to 15% to 20% for startups or special-purpose properties. On the right deal an SBA loan can finance up to 90% of the project. Full guide: SBA Loan Down Payment, Rates, and Terms Explained

Up to 25 years for real estate, which keeps payments low. Equipment and working-capital portions carry shorter terms. The long amortization is a core advantage of SBA financing. Full guide: SBA Loan Down Payment, Rates, and Terms Explained

7(a) rates are usually variable and tied to the Prime rate, while the SBA 504 carries a long-term fixed rate on the CDC portion. Placing your file across multiple lenders helps find the strongest pricing. Full guide: SBA Loan Down Payment, Rates, and Terms Explained

An operating business that will occupy the property, and a file that survives federal eligibility review. $1M sits comfortably inside our $350K to $5M and up range, financed up to 90% on terms up to 25 years. The size is rarely the obstacle. Occupancy and eligibility are. Full guide: The $1M SBA Loan: What 7(a) and 504 Look Like at That Size

Plan on 30 to 90 days regardless of the amount. The timeline is driven by federal review, not loan size, so a larger file is not necessarily slower. If you are competing for the property, consider a bridge loan to buy now and an SBA refinance afterwards, rather than asking a seller to wait out the process. Full guide: The $1M SBA Loan: What 7(a) and 504 Look Like at That Size

It turns on use of proceeds. If you need working capital or are buying a business alongside the property, 7(a) handles it in one facility. If it is purely owner-occupied real estate, 504 offers a fixed-rate debenture portion that is attractive on a long hold. Full guide: The $1M SBA Loan: What 7(a) and 504 Look Like at That Size

No. SBA real estate financing requires the property to be owner-occupied, with your business occupying at least 51% of the rentable space in an existing building, or 60% in new construction. A property you intend to lease out entirely needs conventional or CRE financing instead. Full guide: The $1M SBA Loan: What 7(a) and 504 Look Like at That Size

Because the structure pairs a conventional first from a lender with a debenture through a Certified Development Company, and you contribute the balance. It means more coordination and a longer timeline, in exchange for a fixed rate on the debenture portion. Full guide: The $1M SBA Loan: What 7(a) and 504 Look Like at That Size

A cash-out refinance replaces your first mortgage. A second mortgage sits behind it. With a refinance you pay off the old first loan and take a new, larger one, so your whole balance moves to new terms. With a second lien your first mortgage stays exactly where it is, and you add a separate loan against the remaining equity. If you hold a first mortgage you want to keep, the second lets you pull equity without touching it. The trade-off is position: the second lender is paid after the first, so the loan is sized on combined debt. Run both options on your own numbers. See cash-out refinance on an investment property and lien position explained.

Loan amounts run $50K to $1M, up to 80% combined loan-to-value (CLTV), as a lump sum or a line of credit, subject to underwriting. CLTV counts every lien on the property, your first mortgage plus the new second. For example, a $400,000 property at 80% CLTV caps total debt at $320,000 ($400,000 x 80%). Less a $180,000 first mortgage, that leaves up to $140,000 for the second ($320,000 - $180,000). With a $290,000 first, only $30,000 is left ($320,000 - $290,000), which is under the $50K minimum, so the loan does not fit that file. Figures are illustrations, not a quote.

It depends on what your first mortgage says. Your first mortgage may restrict junior liens: the standard 1-4 Family Rider, which Fannie Mae requires on the one- to four-unit investment loans it buys and which some other lenders also use, bars one without the first lender's written permission. Read yours before you apply. Garn-St Germain's implementing rule limits its junior-lien protection to loans on a home the borrower occupies or will occupy (12 CFR 191.5(b)), so it does not cover a rental. Talk to your attorney if the clause applies. A second lien is also paid after the first. If you later refinance the first mortgage, the second-lien holder generally has to sign a resubordination agreement so the new first keeps its position.

Investors who own a rental with equity and a first mortgage worth keeping. The property is a 1 to 4 unit residential investment property worth at least $100,000, non-owner-occupied, and short-term rentals such as Airbnb and VRBO are eligible. You can borrow as an individual or through an entity such as an LLC, and there is no seasoning requirement. Typical uses are a down payment on the next deal, a renovation on a property you hold, or paying off debt on the investment. Funds have to go to a business purpose, and we will ask what the money is for. If a refinance would reset a first mortgage you like, a second lien leaves it alone. See BRRRR financing for one way investors recycle equity.

A 1.00 minimum debt service coverage (DSCR), a 660 minimum FICO, and combined loan-to-value across every lien under the 80% cap. We also check that the property is non-owner-occupied investment property, that the use of funds is business purpose, and the terms of your first mortgage, including any clause that limits a second lien. Rent from a short-term rental counts toward DSCR. We may use an automated valuation, and a full appraisal can still be required depending on the findings and the LTV. The rate is fixed, and the prepayment penalty is 0 to 5 years. Every loan is conditional on the borrower and the property, some files may be placed with partner lenders, and this is not a commitment to lend. Terms are subject to underwriting.

No. This program is business-purpose only, on non-owner-occupied investment property. It is not a consumer loan, and we do not offer it on the home you live in or a second home. Federal rules treat credit to buy, improve or maintain a rental you do not occupy as business purpose, as long as you do not expect to stay there more than 14 days in the coming year (12 CFR 1026.3, comment 3(a)-4). Other uses of the cash have to stand on their own business purpose. If you plan to use the property yourself, this is the wrong product.

Yes, on a rental, within the lender's limits and your first mortgage's documents. A second records behind your first, as a lump sum or a line of credit. Typical terms on our program, subject to underwriting, are $50,000 to $1,000,000 and up to 80% CLTV. Your first mortgage may need to allow a junior lien, and the loan has to be for a business purpose. Full guide: What Is a Second Mortgage on an Investment Property?

It is a loan secured by a rental you already have a mortgage on, recorded behind the first. A closed-end second pays you a lump sum at closing, while a line of credit lets you draw as you go. Either way it leaves your first mortgage, with its balance, rate and payment, in place. You then make two payments on the same property. Full guide: What Is a Second Mortgage on an Investment Property?

Yes. If you own a rental with equity, a second can sit behind your first mortgage, within the lender's limits. Typical terms on our program, subject to underwriting, are $50,000 to $1,000,000, a 660 minimum FICO and up to 80% CLTV. Your first mortgage documents may restrict it. Full guide: What Is a Second Mortgage on an Investment Property?

On a rental you do not live in, it is a business-purpose loan. Federal rules treat credit to buy, improve or maintain a non-owner-occupied rental as business purpose, unless you expect to occupy it more than 14 days in the coming year (Regulation Z, comment 3(a)-4). Full guide: What Is a Second Mortgage on an Investment Property?

Not if you expect to occupy it more than 14 days in the coming year. That puts it outside the federal non-owner-occupied business-purpose test (Regulation Z, comment 3(a)-4). This program is for non-owner-occupied investment property only. Full guide: What Is a Second Mortgage on an Investment Property?

Yes, because it is repaid after the first. In Texas, foreclosure of a senior lien generally extinguishes junior liens (Diversified Mortgage Investors v. Lloyd D. Blaylock General Contractor, 576 S.W.2d 794 (Tex. 1978)), which is one reason second-lien programs cap combined debt. Your obligation to pay what you owe does not depend on the order of the liens. Full guide: What Is a Second Mortgage on an Investment Property?

Both. Our second mortgage program offers a lump-sum (closed-end) second and a line of credit (HELOC). Typical terms, subject to underwriting: a fixed rate from 6.99%, $50,000 to $1,000,000, up to 80% CLTV. Every loan is conditional on the borrower and the property. Full guide: What Is a Second Mortgage on an Investment Property?

A 1 to 4 unit residential investment property worth at least $100,000, held by an individual or an entity such as an LLC. The property must be non-owner-occupied. Short-term rentals (Airbnb, VRBO) are eligible, and there is no seasoning requirement. The full list is in second mortgage requirements. Full guide: What Is a Second Mortgage on an Investment Property?

A cash-out refinance replaces your loan; a second mortgage sits behind it. With a refinance you get one new loan and one payment, at one rate on the full balance. With a second you keep your first mortgage untouched and add a separate loan with its own payment. Full guide: Second Mortgage vs Cash-Out Refinance on a Rental Property

A second is a good idea when you want to keep a first mortgage rate you could not get today; a refinance is better when that rate is not worth protecting. Either way your total debt rises by the cash you take out, a second adds a second payment, and your first mortgage may need to allow it. Compare the blended cost of both with real quotes. Full guide: Second Mortgage vs Cash-Out Refinance on a Rental Property

Weight each rate by its balance and divide by total debt. Multiply your first balance by its rate, multiply the second balance by its rate, add them, and divide by the combined balance. Do the same for the refinance on its full balance. Our calculator uses the rates you enter. Full guide: Second Mortgage vs Cash-Out Refinance on a Rental Property

Not always, and only real quotes will tell you. A second sits behind the first and is repaid second in a foreclosure, and that risk is one reason second-lien programs cap combined debt. What matters is the blended cost across both loans against the cost of refinancing everything. Full guide: Second Mortgage vs Cash-Out Refinance on a Rental Property

A second may not fit, because typical terms start at $50,000. The room under the CLTV cap also has to reach that figure. When it does not, compare a cash-out refinance, keeping in mind that its own LTV cap limits the cash too. Terms are subject to underwriting. Full guide: Second Mortgage vs Cash-Out Refinance on a Rental Property

It carries its own closing costs on top of your first. Ask for a written estimate of every fee, such as valuation, title and recording, and compare the total against a refinance, which has the same categories on a larger loan. Full guide: Second Mortgage vs Cash-Out Refinance on a Rental Property

Pull it only if the cash earns more than the debt costs. A second adds a payment, so the new property or rehab has to cover it. Run the numbers in the calculator with your own rates. Full guide: Second Mortgage vs Cash-Out Refinance on a Rental Property

Yes, a second mortgage takes cash out without touching the first. The first keeps its rate and schedule, and only the new money carries a new rate. If you own several rentals with low-rate firsts, see pulling equity from several rentals. Full guide: Second Mortgage vs Cash-Out Refinance on a Rental Property

Yes. USA Mortgage offers a line of credit (HELOC) on a rental, alongside a lump-sum second. Some banks write HELOCs only against a home you live in, so other lenders differ. Check the draw period, the repayment terms and the minimum FICO before you compare it to a lump-sum loan. Full guide: Second Mortgage vs HELOC on an Investment Property

On a rental, a closed-end second mortgage and a home equity loan describe the same structure. It is a lump-sum loan secured behind your first mortgage, and it does not change the rate or term of the first. The word "home" does not make it a consumer loan here. A business-purpose loan on a rental is underwritten as business credit. Full guide: Second Mortgage vs HELOC on an Investment Property

No. This program funds business purposes only, on non-owner-occupied investment property. Federal rules treat credit to buy, improve or maintain a rental you do not occupy as business purpose (Regulation Z, comment 3(a)-4). Tell the lender what the money is for. Full guide: Second Mortgage vs HELOC on an Investment Property

A closed-end second fits a rehab with a known budget; a line fits spending you cannot size yet. If you know the number, one lump sum at closing is simpler. If the scope may change, a line gives room, at the cost of more moving parts and lender-specific draw rules. Full guide: Second Mortgage vs HELOC on an Investment Property

It can be, if your spending is unpredictable and you want room to draw as you go. If you need one known amount, a closed-end second is simpler. Read the draw and repayment terms before you sign. Full guide: Second Mortgage vs HELOC on an Investment Property

Texas home equity rules apply to a homestead, not to a rental that is not your homestead. A second lien on a non-homestead rental follows the same checks as anywhere else. See second mortgages on Texas rental property for what lenders verify. Full guide: Second Mortgage vs HELOC on an Investment Property

On USA Mortgage's program, fixed, for both the line of credit and the lump-sum second. Typical rates start at 6.99%, subject to underwriting. Other lenders set their own rate structure, so ask. Full guide: Second Mortgage vs HELOC on an Investment Property

On our program, the property has to carry a debt service coverage ratio (DSCR) of at least 1.00. Typical terms, subject to underwriting, include a 660 minimum FICO and up to 80% CLTV on a 1 to 4 unit non-owner-occupied investment property worth at least $100,000. Short-term rental income counts. Every loan is conditional on the borrower and the property. Full guide: Second Mortgage vs HELOC on an Investment Property

Typical USA Mortgage terms, subject to underwriting, start at a 660 minimum FICO. Other lenders set their own, so ask each one for its credit requirements before you apply. Full guide: Investment Property Second Mortgage Requirements: What Lenders Check

Enough that your first mortgage plus the new loan stays under the CLTV cap. At an 80% cap, that means the first and second together cannot exceed 80% of the value. A $400,000 rental with a $180,000 first has room for $140,000 ($400,000 x 80% = $320,000, minus $180,000). A $290,000 first leaves $30,000 ($320,000 - $290,000), which is under a $50,000 minimum. Full guide: Investment Property Second Mortgage Requirements: What Lenders Check

On our program, on debt service coverage (DSCR), with a minimum of 1.00. DSCR compares the property's rent to its payment, and at 1.00 the rent covers the payment. Alt-doc and full-doc programs at other lenders ask for more of your own documents. Every loan is conditional on the borrower and the property. Full guide: Investment Property Second Mortgage Requirements: What Lenders Check

Yes. On our program the borrower can be an individual or an entity, such as an LLC. The property must still be non-owner-occupied investment property, and the loan is for a business purpose. Every loan is conditional on the borrower and the property. Full guide: Investment Property Second Mortgage Requirements: What Lenders Check

Yes. Short-term rentals are eligible on our program, and the rental income counts. Qualification is on DSCR, with a minimum of 1.00. The property still has to be a 1 to 4 unit non-owner-occupied investment property worth at least $100,000, and every loan is conditional on the borrower and the property. Full guide: Investment Property Second Mortgage Requirements: What Lenders Check

Not on our program. There is no seasoning requirement. You do not have to have owned the property for a set period before you borrow against it. Other lenders may set their own rule, so ask. Every loan is still conditional on the borrower and the property. Full guide: Investment Property Second Mortgage Requirements: What Lenders Check

On our typical terms, subject to underwriting, a second closes in 3 to 4 weeks. The pace depends on how quickly the valuation, title, payoff or lien documents and any first-lender permission come in. We may use an automated valuation (AVM), and a full appraisal may still be required, depending on the findings and the LTV. Full guide: Investment Property Second Mortgage Requirements: What Lenders Check

A 1 to 4 unit residential investment property, non-owner-occupied, worth at least $100,000. Loan amounts run from $50,000 to $1,000,000, up to 80% CLTV, typical terms subject to underwriting. If you own the rental free and clear, we can take the first lien. Full guide: Investment Property Second Mortgage Requirements: What Lenders Check

You might need it. The standard 1-4 Family Rider bars a junior lien without the first lender's written permission. Fannie Mae requires that rider on the one- to four-unit investment loans it buys, and some other lenders also use it. Whether yours carries the clause is a question for your own documents and your attorney. Full guide: Can You Put a Second Lien Behind a DSCR or Conventional First?

It can, if your documents bar a junior lien without permission. The 1-4 Family Rider says the borrower shall not allow a lien inferior to the security instrument without the lender's prior written permission. The federal protection that stops a lender from calling a loan over a junior lien covers homes the borrower occupies (12 CFR 191.5(b)), so a rental is outside it. What the first lender can do after a breach is set by your own documents, so read them and ask an attorney. Full guide: Can You Put a Second Lien Behind a DSCR or Conventional First?

Check your own loan documents. Many first mortgages restrict junior liens without the lender's written permission. The standard 1-4 Family Rider carries that covenant. Read the security instrument and any riders, and ask your servicer, before you apply for a second. Full guide: Can You Put a Second Lien Behind a DSCR or Conventional First?

A due-on-encumbrance clause restricts a new lien on the property without the lender's permission. On agency-form rental loans, the restriction sits in the 1-4 Family Rider's subordinate-lien covenant, and breaching it is a default under the mortgage. Read your own documents for the exact wording. Read the lien position guide for how a second ranks behind the first. Full guide: Can You Put a Second Lien Behind a DSCR or Conventional First?

Yes, with the second lender's cooperation. The new first is recorded after the second, so the second-lien holder generally has to sign a resubordination agreement to keep its position. Ask any second-lien lender about its subordination policy and any fee before you close. Full guide: Can You Put a Second Lien Behind a DSCR or Conventional First?

The second-lien holder can enforce its own loan documents, and a default can also put you at odds with your first lender. Your first mortgage may treat a problem with a junior lien as its own issue under the rider covenant. Remedies depend on your documents and your state, so ask an attorney before you take on a second you cannot carry. Full guide: Can You Put a Second Lien Behind a DSCR or Conventional First?

Some banks write HELOCs only against a home you live in, so a rental can fall outside the program. That is a bank policy, not a federal rule. USA Mortgage offers a line of credit on a rental, alongside a lump-sum second. The second mortgage vs HELOC guide compares them. Your first lender's own restrictions on junior liens still apply either way. Full guide: Can You Put a Second Lien Behind a DSCR or Conventional First?

Then there is no first lender to get permission from. USA Mortgage can be the first lien on a rental you own free and clear, on the same typical terms, subject to underwriting. Every loan is conditional on the borrower and the property. Full guide: Can You Put a Second Lien Behind a DSCR or Conventional First?

Not a homestead-style home equity loan on a rental, but you can generally get a second lien, as a lump sum or a line of credit, on a non-homestead rental. The section 50(a)(6) home equity rules apply to a lien on a homestead, so a second mortgage on a rental that is not your homestead is generally an ordinary deed-of-trust lien. The lender will still verify occupancy and use, and your first mortgage may need to allow it. Ask a Texas real estate attorney about your property. Full guide: Second Mortgage on a Texas Rental Property: What the Homestead Rules Cover

They apply to a lien on a homestead, not to a non-homestead rental. The cap of 80 percent of value on the new loan plus all other debt on the homestead, and the cap on fees, with some exclusions, at two percent of the original principal amount, are conditions of a section 50(a)(6) home equity loan. A property that is not the homestead is outside section 50. Confirm the status of your property with an attorney. Full guide: Second Mortgage on a Texas Rental Property: What the Homestead Rules Cover

Homestead turns on use and intent, so history matters. Texas looks at how you use the property and what you intend. Evidence of when you moved out, a lease to a tenant, and where you live now all bear on it. This is a question for a Texas real estate attorney. Full guide: Second Mortgage on a Texas Rental Property: What the Homestead Rules Cover

Title companies may treat it as a homestead by default. A Texas mortgage-law firm notes that title companies may treat a borrower's only Texas residential property as a homestead by default, and may not accept a non-homestead affidavit alone. Talk to your title company and attorney early. Full guide: Second Mortgage on a Texas Rental Property: What the Homestead Rules Cover

Generally outside court, under the deed of trust's power of sale. A lien on non-homestead property is generally foreclosed under the deed of trust and Property Code section 51.002. A section 50(a)(6) homestead lien requires a court order. Full guide: Second Mortgage on a Texas Rental Property: What the Homestead Rules Cover

A lien on a homestead is invalid unless it secures a debt on the section 50 list. Section 50(c) of Article XVI says no mortgage, trust deed or other lien on the homestead is valid otherwise (text of section 50). That is why occupancy is checked before a second lien closes on a Texas rental. Full guide: Second Mortgage on a Texas Rental Property: What the Homestead Rules Cover

Yes. A second mortgage on a rental can fund the down payment on another investment property. You borrow against the equity in Property A, and the lump sum funds the down payment on Property B. The business purpose is the purchase of investment property. Ask the lender on Property B whether it accepts borrowed funds. Full guide: Using Rental Equity for the Down Payment on Your Next Property

The most you can borrow is the value times the CLTV limit, minus what you owe on the first. At up to 80% CLTV, a $400,000 rental with a $180,000 first supports up to $140,000 ($400,000 x 80% = $320,000, minus $180,000). Typical loans run $50,000 to $1,000,000, subject to underwriting. Full guide: Using Rental Equity for the Down Payment on Your Next Property

A second fits when you want to keep your current first mortgage. A refinance reprices your whole loan, while a second applies a new rate only to the cash you take out. Our guide to second mortgage vs cash-out refinance walks through the comparison. Full guide: Using Rental Equity for the Down Payment on Your Next Property

Start it before you go under contract on the next property. On our typical terms a second closes in 3 to 4 weeks, subject to underwriting, so the funds can be in your account when the contract needs them. Full guide: Using Rental Equity for the Down Payment on Your Next Property

It can, because the next lender sees a new payment and a new balance. Ask the lender on Property B how it counts the payment before you close the second. The result depends on that lender's rules, not ours. Full guide: Using Rental Equity for the Down Payment on Your Next Property

A lump sum fits when you know the exact amount the closing needs; a line of credit fits when the amount may change. USA Mortgage offers both, at a fixed rate, with a prepayment penalty: 0 to 5 years. Size the draw to the cash Property B needs, and count the payment on Property A before you close. Terms are typical and subject to underwriting. Full guide: Using Rental Equity for the Down Payment on Your Next Property

Yes, if it is a second mortgage on a rental you already own, and the money buys the next rental. The loan is secured by Property A, a non-owner-occupied investment property, not by the one you are buying. We do not offer it on a primary residence or second home. Terms are typical and subject to underwriting. Full guide: Using Rental Equity for the Down Payment on Your Next Property

Combined loan-to-value is the total of all liens on a property divided by its value. It includes your first mortgage, any other liens, and the new second. A lender uses it to cap how much you can borrow against a property. Full guide: CLTV Explained for Investment Property Second Mortgages

Add every lien balance, including the new second, and divide by the property value. A $400,000 rental with a $180,000 first and a $140,000 second: ($180,000 + $140,000) / $400,000 = 80% CLTV. To go the other way, multiply the value by the CLTV limit and subtract what you already owe. Full guide: CLTV Explained for Investment Property Second Mortgages

The most you can take out is the value times the CLTV limit, minus what you owe. At 80%, a $400,000 rental with a $270,000 first leaves $50,000 ($400,000 x 80% = $320,000, minus $270,000), the typical minimum loan. With a $180,000 first it leaves $140,000 ($320,000 - $180,000). Terms are typical, subject to underwriting, and the value is the lender's. Full guide: CLTV Explained for Investment Property Second Mortgages

LTV counts one loan; CLTV counts all of them. With only a first mortgage the two are the same number. Once you add a second, CLTV is the one that sets your limit. Full guide: CLTV Explained for Investment Property Second Mortgages

Up to 80% CLTV is typical for our second mortgage, subject to underwriting. "Up to" means the figure for your file can be lower. Every loan is conditional on the borrower and the property. Full guide: CLTV Explained for Investment Property Second Mortgages

The maximum second shrinks. Every dollar of lost value cuts the combined debt allowed by 80 cents at an 80% cap. A rental valued at $380,000 instead of $400,000, with a $180,000 first, supports a second of up to $124,000 instead of $140,000. Full guide: CLTV Explained for Investment Property Second Mortgages

Not always. We may use an automated valuation (AVM), but a full appraisal can still be required. It depends on the findings and the LTV. The value the lender settles on is the number your CLTV is measured against. Terms are typical and subject to underwriting. Full guide: CLTV Explained for Investment Property Second Mortgages

Yes, when it falls below the minimum loan. Typical terms start at $50,000, and the property has to be worth at least $100,000. A $400,000 rental with a $290,000 first leaves $30,000 under an 80% cap, which is below that, so a second would not fit. Full guide: CLTV Explained for Investment Property Second Mortgages

A second mortgage fits when your first mortgage is worth keeping; a refinance fits when it is not. A second leaves the first untouched and borrows only the new amount, but it adds a second payment and a junior lien. A cash-out refinance gives you one loan and one payment, and it reprices the whole balance. If your first carries a rate you would not get today, compare the two on your own numbers. Full guide: Second Mortgage on an Investment Property: Pros and Cons

The main risks are a second payment, junior-lien position, and restrictions in your first mortgage. Liens are generally paid in the order they were recorded, and foreclosure of the first can wipe out the second. Your first mortgage may also bar a junior lien without the first lender's written permission. Full guide: Second Mortgage on an Investment Property: Pros and Cons

The second lender can start foreclosure on the property, and the first mortgage stays in place ahead of it. Missing payments on the second can also breach the terms of your first mortgage, so a problem on one loan can become a problem on both. Read the default terms in both loan documents before you sign, and run the combined payment against the rent first. For legal questions, talk to a real estate attorney. Full guide: Second Mortgage on an Investment Property: Pros and Cons

Both loans are paid off from the sale proceeds at closing, first lien first. If the sale price does not cover both balances, you would need to bring cash to closing. Ask the title company for a payoff statement on each loan, and check your second's loan documents for any prepayment terms. Full guide: Second Mortgage on an Investment Property: Pros and Cons

That depends on the terms in your loan documents, so check before you sign. Some loans carry a prepayment penalty and some do not. On a USA Mortgage second, the typical prepayment penalty is 0 to 5 years, subject to underwriting. Ask any lender for the prepayment terms in writing, and compare them to how long you expect to hold the loan. Full guide: Second Mortgage on an Investment Property: Pros and Cons

Expect lender charges, title and escrow charges, recording fees and a property valuation. The amounts depend on the lender, the loan size and the state. Ask for a written estimate of every charge before you commit, and add it to the cost of the money when you compare a second with a refinance. Full guide: Second Mortgage on an Investment Property: Pros and Cons

Yes, by taking a second mortgage on one or more of the rentals instead of refinancing them. Each second is a separate loan secured by one property and sized by that property's CLTV, and each first stays in place with its own rate and payment. Check each first's documents first, because a first may bar a junior lien without the first lender's written permission. Full guide: Pulling Equity From Several Rentals Without Refinancing Them

It is figured one property at a time. Take the property's value x the CLTV limit, then subtract that property's first. At 80%, a $350,000 rental with a $140,000 first leaves $350,000 x 80% - $140,000 = $140,000. Equity in one rental does not count toward another. Full guide: Pulling Equity From Several Rentals Without Refinancing Them

Only on the ones that clear the numbers. Each property needs enough room under the CLTV cap to reach the $50,000 minimum loan size under typical terms, which are subject to underwriting, and a value of at least $100,000. A rental owned free and clear can also take a USA Mortgage loan in first lien position. In the example above, a $220,000 rental with a $150,000 first has only $26,000 of room, so it does not fit. Full guide: Pulling Equity From Several Rentals Without Refinancing Them

No. A cash-out refinance on each property and a portfolio loan are the other routes. Cash-out replaces each first and reprices the whole balance. A portfolio loan puts several properties under one loan and one payment. Seconds keep each first in place, which matters most when the firsts carry low rates. Full guide: Pulling Equity From Several Rentals Without Refinancing Them

Generally yes, one per property where the second stays in place. A new first records after the existing second, so the second-lien holder signs to keep its position. Fannie Mae does not require one where state law lets the second keep its position (Selling Guide B2-1.2-04). Several seconds means several of these. Full guide: Pulling Equity From Several Rentals Without Refinancing Them

Yes. Our portfolio loan program puts a group of rentals under one loan. It is separate from the second mortgage program. See the portfolio loan program, which lists its own typical terms, subject to underwriting. Full guide: Pulling Equity From Several Rentals Without Refinancing Them

Pull it only if the new money earns more than the second costs you, and the rent still covers every payment. Placeholder numbers, not a USA Mortgage quote: say a $100,000 second costs $833 a month. If the rental nets $1,500 a month after its first mortgage and expenses, that leaves $1,500 - $833 = $667. If the $100,000 buys a property that nets $1,200 a month, you come out ahead. If it sits idle, you pay $833 a month for nothing. Keep a vacancy reserve and compare the result with a cash-out refinance. Full guide: Pulling Equity From Several Rentals Without Refinancing Them

With USA Mortgage there is no limit on how many second mortgages one borrower can have. Each second is a separate loan on a separate property, sized on its own CLTV, so what limits you is the equity and cash flow on each rental, not a count. Other lenders set their own rules, so ask them up front, and add up every new payment before you apply. Full guide: Pulling Equity From Several Rentals Without Refinancing Them

It can be, depending on what you spend the loan proceeds on. IRS Publication 527 says you can deduct mortgage interest you pay on your rental property. The IRS allocates interest by the use of the money, so proceeds used for personal purposes do not produce a rental expense. Ask a CPA how it applies to your return. This is general information, not tax advice. Full guide: Is Interest on a Rental Property's Second Mortgage Tax Deductible?

Under the IRS tracing rule, the interest follows the use of the proceeds, not the property that secures the loan. Publication 535 says the allocation of proceeds and interest is generally not affected by the use of property that secures the loan. Interest on money spent on the second rental generally relates to that rental. Keep records of where the money went, and ask a CPA how to report it. Full guide: Is Interest on a Rental Property's Second Mortgage Tax Deductible?

The personal portion of the proceeds produces personal interest, which is not a rental expense. Publication 527 says the portion of interest allocable to proceeds not related to rental use generally can't be deducted as a rental expense. If one loan funds both a rental and something personal, the interest is split by use. Ask your CPA how to track it. Full guide: Is Interest on a Rental Property's Second Mortgage Tax Deductible?

Points are generally deducted over the term of the loan, not all in the year you pay them. Publication 527 treats points as prepaid interest. It also says certain costs of getting a rental mortgage, such as mortgage commissions, abstract fees and recording fees, are capital expenses added to your basis rather than interest. Your CPA can tell you how your specific charges are treated. Full guide: Is Interest on a Rental Property's Second Mortgage Tax Deductible?

Rental income and expenses are reported on Schedule E (Form 1040), according to IRS Publication 527. Other forms can apply in other rental situations, and rental losses can be limited by passive activity rules. A CPA can confirm what your return needs. Full guide: Is Interest on a Rental Property's Second Mortgage Tax Deductible?

Possibly. The IRS allocates interest by what you spend the proceeds on, not by what secures the loan. Publication 535 says the allocation of loan proceeds and the related interest is generally not affected by the use of property that secures the loan. Money spent on a rental can relate to rental use even when the lien is on another property. Keep the proceeds traceable and ask a CPA how it applies. This is general information, not tax advice. Full guide: Is Interest on a Rental Property's Second Mortgage Tax Deductible?

A DSCR second mortgage is a second-lien loan on a rental that the lender sizes on the property's rent instead of your personal income. It records behind your first mortgage, and the lender compares the rent to the combined payment on both loans. Business-purpose lending only, subject to underwriting. Full guide: DSCR Second Mortgage: How Lenders Size a Second on Rental Cash Flow

Yes. A DSCR loan can be a second-lien loan. The loan sits in second position behind your first mortgage, and the lender compares the rent to the combined payment on both loans. Full guide: DSCR Second Mortgage: How Lenders Size a Second on Rental Cash Flow

It adds the second payment to the first, then divides the rent by the total. As a placeholder example: $3,000 rent, a $1,800 first payment and a $500 second payment give $3,000 / $2,300 = 1.30. The numbers are an example, not a USA Mortgage rate or quote. Full guide: DSCR Second Mortgage: How Lenders Size a Second on Rental Cash Flow

There is no single number. Each lender that writes DSCR seconds sets its own minimum DSCR, and the minimum is tested on the combined payment of both loans. A bigger second lowers the ratio, so the tighter limit, CLTV or DSCR, sets the loan size. USA Mortgage's typical minimum is 1.00, subject to underwriting. Full guide: DSCR Second Mortgage: How Lenders Size a Second on Rental Cash Flow

It can, because it adds a second payment against the same rent. In the example above, adding a $500 payment takes the ratio from 1.67 to 1.30. A larger second or a lower rent lowers it further. Full guide: DSCR Second Mortgage: How Lenders Size a Second on Rental Cash Flow

Divide the rent by the minimum DSCR, then subtract the first mortgage payment. With placeholder numbers, $3,000 rent / 1.20 = $2,500 of total payment, less a $1,800 first payment, leaves room for a second payment up to $700. The 1.20 is a general example; USA Mortgage's minimum is 1.00, which at the same rent would leave room for up to $1,200. The CLTV cap can still make the second smaller. Full guide: DSCR Second Mortgage: How Lenders Size a Second on Rental Cash Flow

No. A closed-end second pays one lump sum at closing, while a HELOC is a revolving line you draw on. Both sit behind your first mortgage and both can be sized on rent. USA Mortgage offers both a lump-sum second and a line of credit, subject to underwriting. Full guide: DSCR Second Mortgage: How Lenders Size a Second on Rental Cash Flow

At USA Mortgage, yes. Short-term rentals such as Airbnb and VRBO are eligible, and that rental income counts. The property still has to be a 1 to 4 unit non-owner-occupied investment property, and the file is subject to underwriting. Full guide: DSCR Second Mortgage: How Lenders Size a Second on Rental Cash Flow