Higher LTC ratios trigger stricter underwriting requirements.

Generally requires 25% of the purchase price as a down payment, and only 75% of the total rehab budget is advanced to the borrower.

If the borrower has fewer than 3 flips in the past 3 years and the rehab budget exceeds 50% of the purchase price, the deal is considered a heavy rehab and advance rates are reduced.

Lender options become limited and advance rates may be reduced.

Requires demonstrated experience, good credit, a minimum 30% down payment, and the borrower must cover 30% of the rehab costs out of pocket.

Projects that expand the property footprint by more than 20% are treated differently and may reduce available financing.

The source of the down payment is verified. Gift funds, partner equity, or other non-traditional sources may limit lender options.

Some lenders require a licensed general contractor. Others allow the borrower to self-contract. Confirm requirements with your lender before submitting.

The lender releases funds in stages after each phase of the scope of work is completed and inspected. Payouts are based on the originally approved budget amounts — not actual receipts. This means if a borrower budgets $20,000 for windows but negotiates a deal and pays only $10,000, the lender still pays out the full $20,000 — putting money back in the borrower's pocket.

Significantly narrows the pool of lenders willing to participate.

Recent bankruptcy limits available lender options regardless of current credit standing.

Lending options are more limited and may require additional documentation or higher down payments.

Smaller loan amounts reduce lender participation and may affect pricing.

Jumbo DSCR loans require additional documentation and have fewer lender options at the most competitive rates.

Properties with more than 4 units or commercial use have different pricing structures and require additional documentation to qualify for a low 30-year fixed rate.

A vacant property triggers a rate increase or a reduction in the maximum loan-to-value.

Still qualifies for DSCR financing, but loan-to-value is slightly reduced compared to long-term rental properties.

The lender may discount the appraised value if the property was recently acquired or completed, which can reduce the available loan amount.

A recent listing history can trigger additional scrutiny and may affect eligibility depending on the lender.

Rate and terms are determined by the intersection of credit score, loan-to-value, and whether the loan involves cash out. Each factor compounds the effect of the others.

Minority ownership in the entity can limit lender options and affect pricing. However, there are structures and workarounds available — speak with your loan officer for guidance.