Can a fix and flip loan cover both the purchase and renovation?
By AbeAugust 12, 2026Fix & Flip Loans
Short Answer
Yes. Many fix and flip loans can finance part of the purchase and an approved renovation budget, but the borrower usually must contribute equity and follow a draw process for rehab funds.
Full Detailed Answer
Purchase proceeds are funded at closing according to the approved leverage. Renovation funds are typically held back and released in stages after completed work is inspected. The borrower may need to pay contractors first and receive reimbursement, depending on the lender.
Maximum financing may be limited by purchase price, current value, total project cost, or after-repair value. The lender also evaluates the scope, contractor, permits, contingency, borrower experience, and reserves.
Interest, points, inspection charges, extension fees, taxes, insurance, utilities, and selling costs must be included in the project budget. Financing the rehab does not eliminate the need for working capital.
What Abe Will Review
- Acquisition leverage
- Approved rehab holdback
- Draw and reimbursement process
- Carrying costs and contingency
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