What is a Fix and Flip Loan?

A fix and flip loan is a short-term, project-focused mortgage used to purchase a property and pay for renovations. These loans are tailored for investors who plan to renovate and resell a property within a limited timeframe. They typically cover both the purchase price and renovation costs under a single loan, and repayment usually occurs when the property is sold or when a long-term loan is put in place.

Baseline Credit Score Requirement

Many fix and flip loan programs list a minimum credit score requirement. A commonly seen minimum is 620. That means applicants with a credit score of 620 or higher will meet the baseline for many conventional fix-and-flip-style programs. However, credit score is only one part of the underwriting process.

What 620 Means in Practice

A 620 score generally indicates an acceptable credit risk for many lenders, but applicants with scores near that minimum may face additional scrutiny or need stronger compensating factors, such as a larger down payment, documented renovation experience, or a conservative loan-to-value (LTV) based on the after-repair value (ARV).

Can You Qualify with Lower Than 620?

Yes, in some cases. Alternative lenders and private/hard-money lenders sometimes approve borrowers with credit below 620 if other elements of the deal are strong — for example, a low LTV, significant cash reserves, a proven contractor and renovation plan, or strong equity in the property. Expect stricter terms and higher costs when credit is lower.

Other Key Eligibility Requirements

Credit score is important, but lenders evaluate multiple factors when considering a fix and flip loan. Typical eligibility items include:

• Property must be non-owner-occupied (investment property).
• A clear renovation plan and budget, often with line-item estimates.
• Proof of financial stability and ability to repay the loan.
• Experience in real estate or evidence of a capable team; experience is preferred but not always required.
• Minimum loan sizes for some programs; programs often start at a specified minimum amount.
• No recent bankruptcies in many programs (for example, some require no bankruptcy filings within the past two years).

Meeting or exceeding these requirements strengthens your application and can offset a lower credit score.

How Lenders Evaluate Credit Beyond the Score

Lenders rarely look at the credit score in isolation. They also examine credit history patterns and other financial indicators:

• Payment history and recent delinquencies — consistent on-time payments matter most.
• Credit utilization — lower balances relative to limits are better.
• Number and age of credit accounts — established credit with a clean track record helps.
• Recent hard inquiries — many recent applications can be a red flag.

Strong compensating factors (co-investors, cash reserves, contractor relationships) can help mitigate a less-than-perfect credit profile.

Typical Loan Terms and Structure

Fix and flip loans generally have short terms to match the project lifecycle. Typical characteristics include:

• Loan terms commonly range from 6 to 18 months, allowing time for renovation and sale.
• Financing can cover both purchase and renovation costs under a single loan.
• Lenders often use loan-to-value or loan-to-ARV calculations to set maximum advance amounts. Common ranges are 60–75% of ARV for many programs, though specifics vary by lender and deal strength.
• Interest and fees are often structured as part of the loan; repayment is expected at sale or refinance.
• Extension options are often available if the property does not sell within the original term — discuss extensions early to avoid penalties.

Approval speeds vary, but many applicants receive loan approval within about 7–10 business days, allowing rapid move-on-deals when schedules are tight.

Down Payment, Reserves, and LTV Considerations

Down payment and available reserves play a big role in approval, especially if credit is marginal. Lenders generally require:

• An upfront contribution toward the purchase (often expressed as a percentage of the purchase price or ARV).
• Cash reserves to cover unexpected costs during the rehab process.
• Detailed renovation budgets and contractor bids so the lender can verify the scope and cost estimate.

Lower LTV or higher borrower equity reduces lender risk and can improve approval odds and loan structure even with a lower credit score.

Alternatives If Your Credit Score Isn’t Ideal

If your credit score falls short of a program’s preferred threshold, consider these alternatives:

• Partner with an investor who has stronger credit or more experience.
• Use private/hard-money lenders who focus more on property value and exit strategy than credit score.
• Provide a larger down payment or show strong reserves to reduce lender risk.
• Secure a short-term bridge loan or a business line of credit for part of the funding.
• Rehab with a contractor who will accept draws tied to completion milestones, paired with smaller short-term financing.

These options often come with trade-offs—higher costs, shorter terms, or more stringent draw schedules—so evaluate them carefully.

How to Improve Your Approval Odds Quickly

If you want to pursue a fix and flip loan soon but your credit needs work, focus on these practical steps:

• Pay down high credit-card balances to lower utilization.
• Correct errors on your credit report—dispute inaccuracies promptly.
• Catch up on past-due accounts and avoid new delinquencies.
• Consolidate small debts to simplify payments and lower utilization.
• Gather strong documentation: contractor bids, project timeline, permits plan, and proof of reserves.
• Show previous flip/work experience or bring on an experienced partner.

Even short-term improvements, like reducing balances and clearing small delinquencies, can help in underwriting.

Documentation Checklist for Fix and Flip Loans

Having organized documentation speeds approval. Typical documents lenders ask for include:

• Credit report and explanation letters for any derogatory items.
• Personal and business identification (IDs, EINs for LLCs).
• Proof of funds or bank statements showing reserves and down payment funds.
• Purchase contract for the property.
• Detailed renovation budget and contractor bids.
• Exit strategy documentation showing how the loan will be repaid (sale, refinance, etc.).
• Proof of previous flip experience, if applicable (before/after photos, profit/loss statements).

Preparing these items ahead of time shortens underwriting and reduces the chance of last-minute document requests.

Common Underwriting Questions and What Lenders Look For

Underwriters evaluate the following to assess deal viability and borrower reliability:

• Is the renovation plan realistic and costed properly?
• Does the after-repair-value (ARV) support the requested loan amount?
• Does the borrower have the cash or backup plan to finish the project if costs overrun?
• Is the exit strategy credible and likely to result in timely repayment?
• Do credit and financial history indicate responsible behavior?

Clear, realistic answers to these questions increase the chances of approval—even when credit is not perfect.

How Long Does Approval Take?

Approval timelines vary by lender and how complete your application is. Many applicants receive approval within 7–10 business days when documentation is ready and the property and renovation plan are straightforward. Complex deals or missing information can extend timelines, so assembling a complete package is critical for speed.

How to Apply and Where to Start

Start by preparing your documentation and a concise project summary: purchase price, estimated repair costs, ARV, timeline, and your experience or team. Reach out to a lending source with your package and ask for a detailed pre-approval or term sheet. A pre-approval can help you act quickly when you find the right property.

For a fast quote and to explore available fix and flip loan options, you can start here: Get a Fix & Flip loan quote.

Rates are competitive and vary based on your credit score, experience, and project specifics. Reach out for a personalized quote today.

Tips for First-Time Fix and Flip Investors

If this is your first flip, keep these practical tips in mind:

• Start with a conservative budget and timeline; unexpected delays and costs are common.
• Vet contractors carefully and get fixed-price bids whenever possible.
• Keep contingency funds—typically 10–20% of the renovation budget.
• Have a clear exit strategy before closing on the property.
• Track expenses closely and maintain transparent records for the lender and potential buyers.

Good planning reduces stress and protects your investment when markets shift or problems arise.

Common Pitfalls to Avoid

Avoid these frequent mistakes in fix-and-flip projects:

• Underestimating renovation costs or timelines.
• Relying on optimistic ARV estimates without market comps.
• Not having a contingency reserve for surprises.
• Poor contractor selection and lack of written agreements.
• Ignoring lender draw schedules and documentation requirements.

Anticipating these issues in advance improves your chances of a profitable flip.