Home / Loan programs / Fix and flip loans
Fix and flip loans in Houston
Bridge financing for investors who buy, renovate and resell in Houston and Greater Houston. One loan covers up to 90% of the purchase and the entire rehab budget.
Fix and flip loan terms
| Purchase financed | up to 90% |
| Rehab financed | up to 100% |
| Cap on after-repair value | 70 to 75% |
| Credit scores from | 600 |
| Term | 6 to 24 months |
| Payments | interest only |
| Average closing | 21 days or less |
The 90% and 100% figures apply at a 720+ credit score. Below that, leverage and pricing adjust down to a 600 minimum.
How the loan amount is worked out
The loan is built from two numbers. The first is a share of what you pay for the property. The second is your renovation budget, which is held back and paid out in draws as each stage of work is finished. The two together are limited to 70 to 75% of the after-repair value (ARV): the price the property should bring once the work is complete.
Example
| You buy the house for | $260,000 |
| Your rehab budget is | $85,000 |
| Expected resale value (ARV) | $470,000 |
| 90% of the purchase | $234,000 |
| 100% of the rehab | $85,000 |
| Loan amount | $319,000 |
| 75% of ARV, the ceiling | $352,500 |
| Down payment, before closing costs | $26,000 |
How experience and credit change the terms
- First deal? You can still qualify. A new investor with a 720+ score is eligible for the full 90% and 100%.
- Five or more flips in the past two years? You can close with no inspection and no appraisal, up to 75% of ARV.
- Score under 720? Programs run down to 600, with less leverage.
Experience is counted as properties you bought and sold in the past 24 months that were acquired within the past 36 months.
Built around a resale
- Interest-only payments while you renovate
- 6 to 24 month terms
- No prepayment penalty: pay off the day you sell
- No income or job verification
When a project stalls: mid-rehab loans
If a renovation is under way and the money has run out, a mid-rehab loan lends on the property as it stands today and adds the funds to finish.
What a Houston flip involves
- Flood risk. Flooding is the defining risk in Houston. Since 2018, new homes and substantially improved homes inside the city’s 100-year and 500-year floodplains must be built 2 feet above the 500-year flood elevation, and many houses that flooded in Hurricane Harvey or earlier storms carry a history buyers and insurers will ask about. Texas sellers must disclose flood history, and landlords must tell tenants whether a rental is in a 100-year floodplain and whether it has flooded in the past five years. Check the flood maps, the elevation and the flood history before you make an offer.
- Foundations. The Gulf Coast clay under much of Houston swells when wet and shrinks when dry, so foundation movement is common in older slab and pier-and-beam houses. Get a foundation inspection or an engineer’s report before you set the rehab budget.
- Insurance. Hurricane wind, hail and flood drive insurance costs across the Houston area, and flood insurance is a separate policy. In coastal areas such as Galveston and parts of southeast Harris County, wind coverage often comes from the Texas Windstorm Insurance Association, which requires inspected work. Get insurance quotes, including flood, before you make an offer.
- Property tax while you hold. Texas has no state income tax, so local governments rely on property tax. Combined rates in Harris County are often 2% to 2.5% of value, and in suburbs served by a municipal utility district (MUD) they can reach 3% or more. Investment property gets no homestead exemption. For the 2024 to 2026 tax years, the taxable value of non-homestead property worth $5 million or less can rise no more than 20% a year, but the limit resets when the property is sold, so a new buyer is taxed on full market value.
- Low closing taxes. Texas has no state or local transfer tax and no mortgage recording tax, so closing costs are lower than in many states. Title insurance premiums are set by the Texas Department of Insurance, and closings are handled by a title company.
- No zoning, but deed restrictions. Houston is the largest city in the country without a zoning code. What you can build is set instead by deed restrictions, which the city enforces, and by its development rules on lot size, setbacks and parking. That is why townhomes on subdivided lots are common inside the Loop. Read the deed restrictions before you buy a lot or plan an addition.
- Permits and historic districts. The Houston Permitting Center handles city permits, and each suburb runs its own office. Houston has historic districts in the Heights, Montrose, Freedmen’s Town, Old Sixth Ward and Woodland Heights, among others. Exterior work, additions and demolitions in a historic district need a certificate of appropriateness from the Houston Archaeological and Historical Commission as well as a building permit.
- Where the deals are. Independence Heights, Near Northside, Eastwood, Magnolia Park, Sunnyside and Third Ward inside the city; Spring Branch, Oak Forest, Alief and Sharpstown farther out; and older neighborhoods in Pasadena and Baytown.
Documents we ask for
- Loan application
- Signed purchase contract, or the settlement statement from your purchase if you are refinancing
- A rehab budget broken into line items with a clear scope of work
- Contact details for your insurance agent and title company
- For an LLC: articles of organization (certificate of formation in Texas), EIN letter and company agreement
- For experienced investors: your projects from the last 3 years with settlement statements
The full list is in our hard money loan document checklist.
Fix and flip loans: common questions
As much as 90% of the purchase price and 100% of the renovation budget, provided the total loan is no more than 70 to 75% of the after-repair value. Those figures apply to borrowers with a credit score of 720 or higher.
The average is up to 21 days. Once title work and insurance are ready, a loan can close in about 7 days at your title company.
No. First-time investors can qualify. Investors who have completed 5 or more flips in the past 2 years get a shorter process with no inspection or appraisal.
No. Texas has no transfer tax and no mortgage recording tax. Budget for title insurance, which is priced at rates set by the state, and the usual closing and recording fees.
Often, yes, if the house was repaired properly and the numbers account for flood insurance and the disclosure a buyer will see. Tell us the flood history up front.
Often, yes, especially on older houses. The clay soil under much of Houston makes foundation repairs common, so get an inspection before you set the rehab budget.
Yes. When the work is done, a DSCR rental loan can replace the fix and flip loan, with a cash-out refinance at up to 80% loan-to-value.
No. We lend on investment property only.
Under contract on a flip?
Send the address, the price and what you plan to do with the property. We will reply with the leverage and pricing that fit your deal.