Types of Loans for Flipping Houses, and Which Fits Your Deal

There’s no single “house flipping loan.” There are several kinds of financing investors use to buy and renovate properties, and the right one depends on the house, how much work it needs, how fast you need to close and how many deals you’ve done.

Here’s a plain-language rundown of the main options, what each is best for and what to expect from it.

At a glance

Loan type	Best for	Covers rehab?	Typical term	Sized on
Fix and flip loan	Most flips, including first ones	Yes, in draws	6–18 months	Purchase, rehab and ARV
Bridge loan	Fast closes, light work	Little or none	6–24 months	As-is value
Flip line of credit	Experienced flippers doing several deals a year	Yes, per project	Revolving	Your track record, then each deal
Business line of credit	Down payments, overruns, carrying costs	Indirectly	Revolving	Your personal credit
Cash-out loan	Raising cash from a property you already own	No (it funds your cash)	Short or long term	Equity in that property
Rental (DSCR) loan	Keeping the house instead of selling	No	30 years	The property’s rent

Terms vary by lender and market. These are rough guides, not offers.

Fix and flip loans

This is what most people mean by a house flipping loan, and it’s where most first flips start.

A fix and flip loan comes from a hard money or private lender. It covers most of the purchase price and all or most of the renovation, as long as the total stays under a set share of the after repair value (ARV). A common structure is 85–90% of the purchase and 100% of the rehab, capped at 70–75% of ARV. Rehab money is held back and released in draws as the work gets done.

Pros: Closes in one to three weeks, finances the renovation, available to first-timers.
Cons: Higher rates and points than a regular mortgage, and a short term that gets expensive if the project runs long.

More detail: fix and flip loans, and what to expect if this is your first one.

Bridge loans

A bridge loan gets you from now to a planned next step, like a sale, a refinance or the end of a project. It’s based on the property’s current, as-is value, usually up to about 70–80%, and typically includes little or no rehab money.

For flippers, a bridge loan fits when the house needs only light or cosmetic work you can pay for yourself, when you need to close extremely fast (an auction or an estate sale, for example) or when you need to close on the next deal before the last one sells.

Pros: Fast, flexible and simple when there’s not much renovation.
Cons: Doesn’t fund the rehab, and you’ll bring more cash than with a flip loan if the house needs real work.

More detail: bridge loans and when to get one.

Fix and flip lines of credit

Once you’re flipping several houses a year, applying for a new loan on every one gets old. A flip line of credit gives you a single approval you can use across multiple projects. Each house is still reviewed, but much faster, and the room opens back up as each one sells.

Pros: Speed and consistency for repeat deals, and pricing that can improve with volume.
Cons: Built for experienced operators, usually with several completed flips in the last two years and solid cash reserves.

If you’re new, think of this as something to work toward. A few on-time payoffs with one lender is often how investors get there. More detail: fix and flip lines of credit.

Business lines of credit

An unsecured business line of credit isn’t tied to a property. It works more like a credit card for your business, and investors use it for the costs a property loan won’t cover: earnest money, part of a down payment, rehab overruns or carrying costs while a house is on the market.

Pros: Flexible, fast to use once you have it and useful for filling gaps.
Cons: Depends heavily on strong personal credit (often 680–700 or higher), introductory rates expire and it gets expensive if you use it to carry a deal that isn’t working.

More detail: business lines of credit.

Cash-out loans on a property you own

If you own a rental or investment property with equity in it, a cash-out loan lets you borrow against it. Many investors fund their first flips this way, using the cash for a down payment and reserves.

That can be a long-term cash-out refinance on a rental you plan to keep, or a short-term equity loan from a hard money or bridge lender if you need speed.

Pros: Turns equity you already have into the cash every flip requires.
Cons: Puts the property you own on the line, and adds a payment until the flip pays it back.

More detail: cash-out loans on investment property. (Cash-out on the home you live in is a consumer mortgage, handled by licensed mortgage lenders rather than the investor lenders we work with.)

Rental (DSCR) loans, the exit you may need

A rental loan isn’t for funding the flip itself, but it’s worth understanding before you buy. If the house doesn’t sell the way you hoped, or the numbers make more sense as a rental, a long-term loan qualified on the property’s rent (a DSCR loan) can pay off your flip loan and let you keep the house.

Knowing that option exists, and whether the house would qualify, makes any flip less risky. More detail: buy and hold rental loans.

New construction loans

If your plan is to tear down and rebuild, or build on an empty lot, that’s a construction loan rather than a flip loan. They work similarly, with funds released in draws as the build progresses, but lenders usually want to see building experience or an experienced builder on the project. You can tell us about a construction project too.

Other ways investors fund flips

These aren’t loan types we match borrowers with, but you’ll hear about them:

Private money from people you know. Friends, family or other investors lending directly, often secured by the property. Terms are whatever you agree on, so put everything in writing and get the paperwork done properly.
Partnerships. An experienced investor or a cash partner brings money or a track record in exchange for a share of the profit. On a first deal, this can also help you qualify for better loan terms.
A HELOC or cash-out on your own home. Some investors use their home’s equity for down payments. It’s often cheaper money, but your house is the collateral, so be careful.
Bank loans. Possible for some experienced investors with a banking relationship, but most banks are slow and cautious with properties that need work.
Seller financing. Occasionally, a seller will carry part of the price. It’s uncommon, but worth asking about on the right deal.

How to choose

A few questions usually point to the right option:

How much work does the house need? Real renovation points to a fix and flip loan. Light cosmetic work you can pay for might suit a bridge loan.
How fast do you need to close? Most investor loans close in weeks. If you need days, say so up front.
Where’s your cash coming from? If you’re short on down payment, look at cash-out, partners or a business line of credit to fill the gap, carefully.
How many deals are you doing? One or two a year means individual loans. Several means a line of credit may be worth working toward.
What if it doesn’t sell? Make sure a rental refinance is a realistic plan B.

Why a lender who knows your market helps you choose

The right loan isn’t just about the deal on paper. It also depends on where the house is. A lender who funds flips in your area knows:

What the local market rewards. In a competitive market where cash offers win, a lender who can close fast may matter more than a slightly lower rate.
What the house really needs. They’ve seen how similar houses in your area renovate and sell, so they can tell you whether your plan is a light bridge-loan job or a full rehab that needs a flip loan.
Whether your exit works. They know how quickly houses are selling and what rentals bring in nearby, so they can tell you whether “sell” or “refinance and rent” is the realistic plan.

Not sure which fits your deal? The application starts by asking what you’re trying to do, explains each question as you go and connects you with a lender who funds that kind of deal in your area.