The first question most investors ask about a hard money loan isn't the rate — it's how much cash they have to bring to the table. Your down payment determines whether a deal is within reach this month or three months from now, and it's the number that separates investors who can move on a property from those who watch it sell to someone else.
The short answer is that a hard money loan down payment typically runs between 10% and 25% of the purchase price, depending on the program, the property, and your experience. But that range hides a lot of nuance. Hard money lenders don't think in terms of a flat "20% down" the way a conventional mortgage does — they think in terms of loan-to-cost and loan-to-value, and understanding those two ratios is the key to knowing exactly what you'll need at closing.
This guide breaks down what a hard money loan down payment actually looks like across different programs, how lenders calculate it, and the practical strategies investors use to keep their cash-to-close as low as possible. At Funded Capital, we lend up to 90% of cost on fix and flip deals — which means a well-structured project can require far less down than most investors expect.
How Hard Money Down Payments Actually Work
A conventional mortgage sets your down payment as a percentage of the purchase price. Hard money is different because these loans are built around the deal, not your income. Instead of a single down payment figure, lenders use two leverage ratios that together determine how much cash you bring.
Loan-to-Cost (LTC)
Loan-to-cost measures the loan against your total project cost — purchase price plus renovation budget. If a lender offers 90% LTC, they'll fund 90% of your total costs and you cover the remaining 10%. On a fix and flip, this is usually the ratio that matters most, because it captures both the acquisition and the rehab.
Loan-to-Value (LTV) and Loan-to-ARV
Loan-to-value measures the loan against the property's current value, and loan-to-ARV measures it against the after-repair value. Rental and DSCR loans are priced on LTV — Funded Capital lends up to 80% LTV on DSCR — while fix and flip deals are also capped at a percentage of ARV to keep the total exposure safe. Your down payment is whatever the higher-priority ratio requires you to cover in cash.
The practical takeaway: your down payment is the gap between what the lender will advance and what the deal costs. The higher the LTC or LTV a lender offers, the less you put down.
Down Payment by Loan Program
Different programs carry different leverage, so the cash you need shifts depending on what you're financing. Here's how the major programs compare at Funded Capital.
| Loan Program | Typical Leverage | Effective Down Payment | Best For |
|---|---|---|---|
| Fix & Flip | Up to 90% LTC | ~10% of total cost | Buying, renovating, and reselling |
| New Construction | Up to 85% LTC | ~15% of total cost | Ground-up builds |
| DSCR / Rental | Up to 80% LTV | ~20% of value | Long-term rental holds |
| Multifamily | Varies by deal | ~20–25% of cost | 5+ unit properties |
On a fix and flip loan at 90% LTC, an investor buying a $250,000 property with a $60,000 rehab has a total project cost of $310,000. At 90% LTC, the lender advances $279,000 and the investor brings roughly $31,000 — about 10% — plus closing costs. Compare that to a conventional investment mortgage that might demand 20–25% of the purchase price alone, and the leverage advantage of hard money becomes clear.
For new construction loans, leverage is slightly more conservative at up to 85% of cost, reflecting the added risk of ground-up projects. On DSCR loans for rentals, you're looking at roughly 20% down because these are valued on LTV rather than cost.
What Determines Your Exact Down Payment
Two investors looking at the same property can be quoted different down payments. Several factors move the number.
Experience
Track record matters. An investor who has completed several successful flips is a lower risk than a first-timer, and lenders often extend maximum leverage — and therefore the lowest down payment — to proven operators. If you're new, expect to be closer to the conservative end of the range while you build history. Our fix and flip loan requirements guide covers exactly what underwriters look for.
The Strength of the Deal
A property with a conservative, well-supported after-repair value and a realistic rehab budget is easier to fund at high leverage. If the ARV is aggressive or the comps are thin, a lender will pull leverage back to protect the position — which raises your down payment. Running an honest ARV calculation before you apply protects both your margin and your leverage.
Property Type and Condition
Standard single-family and small multifamily properties in solid markets get the best terms. Unusual property types, heavy structural work, or difficult locations can prompt a lender to require more equity in the deal.
Your Liquidity
Beyond the down payment itself, lenders want to see reserves — cash left over after closing to carry the project. Strong liquidity can actually help you secure better leverage, because it signals you can weather a longer timeline or a budget overrun without defaulting.
Strategies to Reduce Your Down Payment
Experienced investors treat the down payment as a variable to manage, not a fixed cost. A few approaches can meaningfully lower the cash you bring.
The most powerful lever is buying right. Because fix and flip loans are capped by both LTC and loan-to-ARV, purchasing below market — the discipline behind the 70% rule — can let the loan cover more of your total cost, shrinking your effective down payment. A deal with strong built-in equity finances more easily than one bought at retail.
Some investors use a partner or private capital to cover the down payment, splitting the profit in exchange for the equity. Others roll projects continuously using the BRRRR strategy — buy, rehab, rent, refinance, repeat — pulling their original down payment back out through a cash-out refinance and redeploying it into the next deal. And working with a lender that offers genuinely high LTC, rather than one that advertises a low rate but caps leverage, often saves more cash at closing than a fraction of a percentage point on the rate ever would.
Finally, cross-collateralization — pledging equity in another property you own — can reduce or in some cases eliminate the cash down payment on a new acquisition. It's an advanced tactic, but for investors with an existing portfolio it can be the difference between doing one deal and doing three.
Move Fast With Leverage That Actually Works
Funded Capital is a Miami-based private lender built for investors who need real leverage and real speed. We finance fix and flip loans from 8.75% with up to 90% loan-to-cost, DSCR loans from 6.0% up to 80% LTV, and new construction from 8.75% up to 85% of cost. We underwrite the deal — the purchase price, the rehab, and the after-repair value — not your tax returns.
That structure is exactly why our borrowers put less down. Higher LTC means less cash out of your pocket at closing, and no income verification on most programs means fewer hurdles between you and funding.
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Frequently Asked Questions
How much is a down payment on a hard money loan?
A hard money loan down payment typically ranges from 10% to 25% of the deal, depending on the program and the property. On a fix and flip at 90% loan-to-cost, an investor puts down roughly 10% of the total project cost plus closing costs. DSCR and rental loans, which are priced on loan-to-value, usually require around 20% down. Apply now to see the exact figure for your deal.
Can you get a hard money loan with no money down?
True zero-down hard money is rare, but it's possible in specific situations — for example, by cross-collateralizing equity in another property you own, partnering with a capital source, or buying far enough below market that the loan covers your full cost. For most deals, expect to bring at least 10% of the project cost.
Do hard money lenders require a down payment on the rehab too?
On a fix and flip, leverage is measured against total project cost, which includes both the purchase and the renovation. At 90% loan-to-cost, you cover about 10% of the combined figure. The rehab portion is typically reimbursed in draws as work is completed, so you fund the renovation and get paid back at each stage.
Why is a hard money down payment lower than a conventional loan?
Conventional investment mortgages often require 20–25% of the purchase price alone, while hard money is structured around loan-to-cost. Because a fix and flip loan can advance up to 90% of your total cost — purchase plus rehab — the cash you bring is often far less than a conventional lender would demand. See our comparison of hard money vs. conventional loans for the full picture.
How can I lower my down payment on a hard money loan?
Buy below market so the loan covers more of your cost, work with a lender that offers high loan-to-cost, use a partner or private capital for the equity, or recycle your capital through the BRRRR strategy with a cash-out refinance. Cross-collateralizing another property can also reduce or eliminate the cash needed at closing.