100% Hard Money Loans for Fix and Flips: What Is Covered and What You Pay

A 100% hard money loan usually means the lender finances the full renovation budget on an investment property. In some programs, it can also mean the lender finances the full purchase price. What it rarely means is that the investor brings no money to closing.

That is where the confusion starts. Lenders advertise “100% financing” because it may be true for one part of the project, usually the rehab budget. The purchase price is still often financed at 80% to 90%, and the total loan is usually capped at 70% to 75% of the after-repair value (ARV).

This article explains what 100% hard money financing really means, how the loan is sized, how much cash investors still need to close, and why “100% financing” does not always mean no money down.

Can You Get a Hard Money Loan With No Down Payment? 

Rarely, and never without cash. A few hard money lenders will fund the full purchase price and renovation budget on deeply discounted properties. Most, however, finance 80% to 90% of the purchase price and expect the investor to cover the rest plus closing costs. 

The reason comes down to risk, and to how a lender actually earns its money.

Hard Money Loans Finance Risky Projects

Hard money lenders finance distressed properties where the investor renovates to create value and build equity. That is where the risk sits. Contractors fall behind, rehab budgets run over, permits stall, and the market can shift before the property sells. 

Any of these can leave the finished home worth less than the ARV used to underwrite the deal.

Investment property loans also sit behind the borrower’s primary residence in practical priority. When cash gets tight, borrowers usually protect the mortgage on the home they live in first. 

That added risk is one reason investment property loan rates are higher than traditional mortgage rates.

Why Lenders Want the Borrower to Have Skin in the Game

When an investor has no money in the deal, nearly all of the risk is passed to the lender, yet the lender's upside is limited to the interest on the loan. 

The investor keeps the profit when the project succeeds. In any investment, higher risk should come with a higher return, and a loan with no borrower equity breaks that balance.

Consider how a bad outcome plays out:

1. A private lender funds a flip with its own capital and money from investors who expect a return.
2. Halfway through the renovation, the borrower stops the project and the house sits unfinished.
3. The lender forecloses, takes back a half-renovated property, and has to sell it at auction or at a steep discount.
4. After legal and carrying costs, the lender may not get its capital back.

A down payment helps balance that risk profile. When the investor has their own money in the deal - skin in the game - both the lender and the borrower have capital at stake and a shared interest in getting the project finished.

Some Costs Don't Shrink With Leverage

Appraisers, title companies, attorneys, and underwriters still need to be paid on every transaction. Lenders also charge origination fees to make the loan.

Those costs apply whether the borrower puts down 10% or gets full purchase financing. That is why even 100% hard money programs still require cash at closing.

No Prepayment Penalty Shortens the Lender's Return

Most fix-and-flip loans, including Ridge Street’s, do not have a prepayment penalty. If the borrower finishes the rehab project early, they can sell the property, repay the loan, and stop paying interest.

That shortens the lender’s expected interest income. Origination points help cover that gap, while borrower equity helps protect the capital at risk.

Which Costs Does "100%" Refer To?

A flipping project has two parts to finance: the property purchase and the renovation. Hard money lenders usually finance each part at a different percentage, then cap the total loan against ARV.

So when a lender says “100% financing,” the real question is: 100% of what, and subject to what ARV cap?

100% of the Renovation Budget

This is the most common meaning. The lender funds the full approved scope of work through a rehab holdback, then releases that money in draws as work is completed. 

The purchase price is financed separately, usually at 80% to 90%. Our fix-and-flip loans guide explains how the initial purchase advance and rehab holdback work.

100% of the Purchase Price

A smaller group of lenders also finance the full purchase price, usually for experienced investors and still under an ARV cap.

These programs usually price the missing equity somewhere else: a higher rate, more points, a shorter term, a lower ARV cap, or a stronger liquidity requirement. 

For example, one national program that advertises 100% of purchase and rehab still requires borrowers to show liquid funds of $15,000 or 25% of the rehab budget, whichever is greater.

A few lenders go further and roll closing costs into the loan. That reduces cash needed at closing, but the borrower pays those costs through a larger loan balance and interest on that balance.

Why the Down Payment Stays the Same When the Rehab Grows

This is the part of 100% rehab financing that surprises most investors. When a lender finances a fixed percentage of the purchase price plus 100% of the renovation budget, the down payment depends only on the purchase price.

For example, at 90% of purchase, an investor buying a $250,000 property brings a $25,000 down payment whether the renovation costs $50,000 or $250,000. The table below shows the effective loan-to-cost (LTC). That is the total loan divided by the purchase price plus the renovation budget, assuming the ARV cap doesn't reduce the loan.

Two things stand out here. 

• First, a heavier renovation raises effective leverage by only a few points, but it raises the ARV the property must support by a lot more. 

At 90% of purchase and a 75% ARV cap, a $50,000 rehab needs an ARV of at least $366,667, while a $250,000 rehab needs at least $633,333.

• Second, 100% rehab financing has the biggest impact on heavier renovations, and lenders usually reserve those projects for experienced borrowers.

Ridge Street, for example, limits first-time flippers to a renovation budget of up to 50% of the purchase price and opens larger scopes as investors complete more projects.

So when comparing term sheets, read the purchase percentage first, because that number sets the down payment. Then check the ARV cap, since a lender will reduce the loan if the full request exceeds it. Our guide to hard money loan requirements shows how that reduction works when the appraisal comes in low.

How Much Cash You Need With 90% Purchase and 100% Rehab Financing

The example below shows the full cash picture on a loan that covers 90% of the purchase price and 100% of the rehab budget. It uses Ridge Street’s published terms for an investor with one or two completed projects and a 740+ credit score.

The deal: a $250,000 purchase price, a $75,000 renovation budget, and a $450,000 ARV. The loan carries a 75% ARV cap, a 2.0% origination fee, and an 11.0% interest rate.

The down payment is $25,000, but the investor writes a check for about $42,150, or 13% of the project cost. Fees and prepaids add roughly two-thirds on top of the down payment, and that pattern holds across deal sizes because most of these line items scale with the loan rather than with the equity.

Lenders also want reserves after closing. At three to six months of interest on the $225,000 initial advance, that is another $6,188 to $12,375, which brings total liquidity to roughly $48,000 to $55,000.

Keep in mind that more leverage also means more monthly interest and less equity to absorb a low appraisal. Before committing, check whether the flip is profitable at that leverage in our fix and flip calculator.

When Do Lenders Fund 100% of the Purchase?

A few national lenders do fund 100% of purchase and rehab, and they work the same way: the combined loan has to fit under an ARV ceiling, and that ceiling moves with the borrower's credit and track record. Published programs generally tier it like this.

If the purchase price plus the rehab budget exceeds the ARV ceiling, the borrower has to bring cash for the difference. That is why the ARV cap matters more than the percentage in the advertisement.

No down payment is not the same as no cash to close. The investor still pays closing costs and reserves, and the extra leverage usually shows up in the rate, points, or a shorter project timeline.

Before accepting any “100% financing” offer, get written answers to these three questions:

1. What the percentage applies to: purchase, rehab, or both, and under which ARV ceiling.
2. What are the fees and how they are paid.
3. When the first draw is released and what each draw costs.

Finance Your Next Flip Project with Ridge Street Capital

If you have a flip in mind, submit the property details, purchase price, scope of work, and estimated ARV through our Quick Application. Our team reviews the deal and sends a term sheet the same business day. 

Once you accept the terms, we collect documents, order the appraisal, and close in 7 to 14 business days.

No property yet? Book a call with the Ridge Street team to walk through a sample deal and get pre-qualified, or learn more about our fix and flip loan program.

Frequently Asked Questions

Can closing costs and origination points be rolled into a hard money loan?

In most cases, no. Most hard money lenders collect origination points, title, and insurance at closing, although a few programs finance them at the cost of a larger balance and more interest. 

What happens to rehab funds that are never drawn?

The lender never disburses them, and on a loan that charges interest only on released funds, they never accrue interest either. If you finish a $75,000 scope for $68,000, you simply never draw the last $7,000.

Can I use a HELOC to fund the down payment on a flip?

Generally, yes, as long as you document where the funds came from. The HELOC is secured by your other property, so a flip that runs late puts both properties under payment pressure. 

Is 100% financing available for rental properties?

Not in the same way. The purchase-plus-rehab structure behind 100% offers applies to renovation loans, because the lender sizes the loan against the finished value. Long-term rental loans on stabilized properties are sized against current value, and most require at least 20% equity. 

Our guide on rental loans with no down payment covers the options. Investors who plan to hold a renovated property often use a fix-and-flip loan first, then refinance the hard money loan once the property is rented.

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