Fix and Flip Loans

What Is a Fix and Flip Loan?

Fix and flip loans are any type of mortgage loan real estate investors can use to buy properties, repair and renovate them, and sell them for profit. Unlike traditional mortgages that span 15-30 years, these loans have shorter loan terms, giving investors just enough time to complete renovations and sell the property.

Fix and flip financing is unique because it considers the property’s potential value after improvements, not just its current condition. Many of these loan options can cover both purchase and renovation costs, making them particularly valuable for investors. The approval process often moves faster than traditional home loans, which helps investors capitalize on opportunities in competitive markets.

Fix and Flip Financing Options

Financing for flipping houses comes in many forms. While there are loans specifically designed for fix and flip projects, real estate investors have several different financing options at their disposal. Here are a few types of loans you can use for fix and flip investments:

Home Equity Loan

A home equity loan lets you fund your fix and flip project using your home’s equity. With these loans, you get a lump sum and a fixed interest rate. Since they’re secured by your property, interest rates are typically lower than other financing options.

You can usually borrow up to 80-90% of your available equity, providing substantial funding for:

• Property purchase costs
• Renovation expenses
• Holding costs during the project

The fixed interest rate and consistent monthly payments help you calculate total project costs upfront. However, using your primary residence as collateral means significant risk — if the flip doesn’t go as planned and you default on payments, you could lose your home. The approval process also requires good credit and verifiable income, which might not work for all investors.

Key Benefits:

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• Lower interest rates compared to unsecured financing options
• Predictable monthly payments help with project budgeting
• Access to substantial funding amounts based on your home equity

Home Equity Line of Credit

A home equity line of credit (HELOC) gives borrowers flexibility by letting them borrow against their home’s equity as needed. You can pull money from the line of credit up to your approved limit and only pay interest on what you take out.

This flexibility works ideally for:

• Managing renovation costs that come in phases
• Covering unexpected repair expenses
• Reusing credit as you pay it back

HELOCs offer lower interest rates than many other fix and flip loan options since they’re secured by your property. While HELOC rates are typically variable, we also offer a fixed-rate HELOC option for borrowers looking for more consistency in their payments.

Like home equity loans, you’re putting your primary residence on the line as collateral, making careful project planning essential. Most HELOCs also have a draw period followed by a repayment period, which could affect your long-term fix and flip strategy.

Key Benefits:

• Pay interest only on the amount you actually use
• Flexible access to funds throughout your renovation project
• Revolving credit line allows reuse as you pay down the balance

Residential Transition Loans (RTL)

Residential transition loans (RTLs) are a specialized financing option designed for real estate investors engaged in fix and flip projects. These loans provide short-term funding to purchase, renovate, and sell properties quickly, making them an ideal solution for investors looking to maximize returns on distressed or undervalued properties.

​​RTLs offer competitive leverage with:

• Loan amounts from $100,000 to $10 million
• Maximum loan-to-value (LTV) ratios up to 80% of “as-is” property value
• Coverage of up to 90% of purchase price
• Up to 100% of renovation costs

RTL financing features flexible underwriting criteria, which focuses more on the project’s value and profitability rather than your personal financial history. Investors with a strong track record in flipping houses can qualify for higher leverage and better terms. RTLs typically feature interest-only payments with fixed interest rates, making them a predictable and manageable financing option.

Since RTLs are designed specifically for investment properties, borrowers must structure their loans under a business entity and cannot use them for owner-occupied properties. Loan terms generally range from 12 to 24 months, with potential extensions based on project progress. Additionally, these loans do not have prepayment penalties, allowing investors to exit early when their projects sell quickly.

Key Benefits:

• High leverage ratios up to 80% LTV plus 100% renovation funding
• Fixed interest rates with interest-only payments during the loan term
• Fast approval process focused on property value rather than personal finances

Hard Money Loan

Hard money loans are popular among experienced house flippers because they focus on your property’s potential rather than your personal finances. These loans for flipping houses look primarily at the property’s after-repair value, making them accessible even if you don’t meet traditional lending requirements.

Hard money loans work especially well for:

• Properties needing significant renovation work
• Properties that wouldn’t qualify for conventional financing
• Competitive market situations requiring fast closings

Hard money fix and flip loans have higher interest rates but offer several advantages that can justify the cost. They can close in as little as two weeks, giving you an edge in competitive markets. Many hard money lenders will also finance a portion of your renovation costs in addition to the purchase price.

Key Benefits:

• Extremely fast closing times, often within two weeks
• Approval based on property value rather than personal credit scores
• Ability to finance both purchase price and renovation costs

Conventional Loan

Conventional loans are common fix and flip loans for beginners and properties that need minimal repairs. These loans offer competitive interest rates and have longer repayment types, which can help keep monthly payments manageable during your renovation period.

Conventional loans suit properties that are:

• In relatively good condition
• Need mainly cosmetic updates

However, conventional mortgage loans have distinct challenges for fix and flip projects. The approval process typically takes anywhere from 30-60 days, which can put you at a disadvantage against cash buyers or hard money borrowers in competitive markets.

These loans require:

• Excellent credit scores
• Significant down payments
• Extensive income documentation
• Properties meeting strict condition requirements

Key Benefits:

• Lowest interest rates among all fix and flip financing options
• Longer repayment terms reduce monthly payment pressure
• Established lending process with predictable requirements

Why Choose a Fix and Flip Loan?

Here’s why fix and flip loans often make sense for property investors:

• Speed to close: Many fix and flip lenders can approve and fund loans within days, helping you beat out competing offers.
• Renovation costs included: Unlike traditional mortgages, these loans often cover both purchase and repair costs.
• Short-term commitment: The brief loan term means you’re not stuck with long-term debt if you want to pursue other investments or try the BRRRR method, where you buy, rehab, rent, refinance, and repeat the process again with another property for long-term wealth-building.
• Experienced-based approval: Some fix and flip lenders focus more on your real estate investment experience than traditional financial metrics.

RTL Financing vs. Hard Money: Which Is Better?

Both RTL and hard money loans serve as crucial financing tools for fix and
flip investors, offering short-term funding for property acquisition and
renovations. While they share similarities, they have key differences that
can impact which option is best for your project.

• Speed and Flexibility: Both RTL and hard money loans provide
  quick access to capital, often closing in as little as 7-14 days.
  However, RTLs tend to offer slightly more structured underwriting
  guidelines, making them more predictable for experienced investors. Hard
  money loans, on the other hand, may have more flexible approval criteria
  based on the property’s potential rather than borrower experience or
  credit history.
• Loan Amounts & Leverage: With higher leverage and better loan-to-cost
  ratios, RTLs are often the better option for experienced investors who
  need maximum financing to scale their fix and flip operations​​.
  • RTL Financing
    • Up to 80% LTV (as-is value)
    • Up to 90% of purchase price
    • Up to 100% of renovation costs
    • Loan amounts from $100K – $10MM
  • Hard Money Loans
    • Typically 65-75% LTV
    • Lower leverage on renovations (usually 75-90% of total costs)
    • Loan amounts vary, but some private lenders cap at $3-5MM
• Rates & Costs: While both options have higher interest rates than conventional loans, RTL financing typically offers lower interest rates and origination fees than hard money loans, especially for experienced investors.

• Loan Terms & Repayment:
  • RTLs: 12-24 months, interest-only payments
  • Hard Money Loans: 6-18 months, interest-only payments
    Both options are designed for short-term projects, but RTL loans often come with slightly longer terms and fewer prepayment restrictions, allowing investors more flexibility.
• Underwriting & Borrower Requirements:
  • RTLs: Typically require a minimum credit score of 620, with a focus on the property’s potential value and the borrower’s experience.
  • Hard Money Loans: Often have more lenient credit requirements, but may require a larger down payment and charge higher fees for higher-risk borrowers.

Which One is Better?

Whether RTL or hard money financing is better depends on your unique situation:

• Choose RTL financing if you’re an experienced investor looking for higher leverage, lower rates, and structured underwriting.
• Choose hard money if you need fast, flexible approval with minimal documentation, even if it comes at a higher cost.

For serious fix and flip investors aiming to scale, RTL financing often provides better terms, lower costs, and more capital to execute projects efficiently.

Partner With an Experienced Fix and Flip Lender

Choosing an experienced lender can make all the difference in your success. The best fix and flip lenders bring more than just funding to the table — they understand local markets, renovation timelines, and the unique challenges that come with property flips.

Griffin Funding specializes in helping new and experienced investors achieve their fix and flip goals. Our team understands the importance of quick closings and reliable renovation funding schedules. Whether you’re planning your first flip or expanding your investment portfolio, we offer personalized lending solutions to match your project needs. Reach out today to get started and download the Griffin Gold app to streamline the lending process.