You found the deal. The numbers work. But your credit score sits somewhere in the 600s and you have never closed a flip before. The bank will not touch this loan. And now you are wondering if any hard money lender will either.

Since founding Hard Money Bankers in 2007 and surviving every market cycle since the financial crisis, I have funded loans for thousands of first-time investors. Many had credit scores that would get laughed out of a bank. Here is what I can tell you: a 620 credit score does not automatically disqualify you from getting a fix and flip loan. Not even close. What matters SUBSTANTIALLY more is whether your deal makes sense.

This guide breaks down exactly what hard money lenders evaluate, why credit score matters less than you think, and how to position yourself for approval on your first flip.

In This Article

The Actual Credit Score Floor for Fix and Flip Loans

Most hard money lenders targeting fix and flip projects have established 600 as their floor. Some go lower. The common range across specialized fix and flip lenders spans from 550 to 650, with meaningful variation between lenders based on their capital structure and risk tolerance.

Here is the reality across the market in 2024 and 2025. Lenders like Easy Street Capital offer programs with a 600 minimum credit score. Flip Funding works with borrowers at 620. Some regional hard money lenders go as low as 550 for the right deal. And a handful of asset-based lenders do not check credit at all.

The distinction worth understanding: some lenders run soft credit checks that do not impact your score, while others conduct full pulls. Eithr way, a 620 credit score puts you squarely within the qualification range for most fix and flip products. You are not an outlier. You are a common borrower profile.

What separates approval from denial at the 600-650 credit range is rarely the score itself. It is everything else in the application.

How Credit Score Affects Your Loan Terms

Credit score does influence your loan. Just not in the way most people assume. Rather than determining whether you get approved, credit score primarily affects pricing. Interest rates, origination points, and sometimes leverage ratios shift based on creditworthiness.

Borrowers in the 600-620 range typically face interest rates in the 11-13 percent band for fix and flip loans. Borrowers with scores above 700 may access rates in the 9-10.5 percent range. On a $300,000 loan with a 12-month term and interest-only payments, the difference between 10 percent and 12 percent translates to roughly $5,000 in additional annual interest. For a six-month hold period, that is about $2,500 in added cost.

Origination points show similar patterns. Hard money lenders typically charge 1 to 6 points depending on borrower profile. Borrowers with low credit scores often face 3-4 points while excellent credit borrowers might negotiate 1-2 points. On a $300,000 loan, this means anywhere from $3,000 to $12,000 in upfront fees based on your credit tier.

The loan-to-value ratio is where things get more nuanced. Contrary to what many assume, lenders rarely disqualify low-credit borrowers by imposing drastically lower LTV ratios. Instead, they maintain consistent maximums but may require higher down payments or compensating factors from borrowers with credit challenges.

What Hard Money Lenders Care About More Than Your Credit

Hard money lending operates on a fundamentally different model than bank lending. The shift is profound: lenders prioritize the property itself, the investment deal structure, and your exit strategy far above your credit history. This asset-based approach is exactly why hard money works for borrowers with credit challenges.

The after-repair value of the property and the overall deal structure constitute the primary underwriting focus. Lenders concentrate on whether the property can realistically be purchased at a sufficient discount, renovated within a reasonable budget and timeline, and resold at a price that justifies the loan risk. A property with a low purchase price relative to its after-repair value indicates strong equity cushion and will often receive approval even from a borrower with a 600 credit score.

Your exit strategy ranks equally critical. Lenders need assurance that you have a clear plan to repay the loan within the term. For fix and flip projects, this means either completing the renovation and selling the property, or refinancing into longer-term conventional financing. A borrower with weak credit can still secure approval by presenting detailed evidence that their exit strategy is viable.

Borrower experience and track record matter too, though this presents both a challenge and an opportunity for first-timers. An investor with five completed flips and a 600 credit score presents lower perceived risk than someone with a 720 score and zero real estate experience. For first-time investors, you can compensate by demonstrating knowledge, having an experienced contractor involved, presenting meticulous deal analysis, and showing financial stability.

Why Your ARV Analysis Matters More Than Your FICO

After-repair value analysis emerges as potentially more influential than credit score in determining loan approval. Understanding this distinction is CRITICAL for first-time investors positioning their applications.

The mechanism is straightforward. When a hard money lender advances funds based on ARV, they calculate: if this project fails and I must foreclose, can I recover my principal from selling the property? A property with strong, conservative ARV supported by robust comparable sales data provides lenders confidence in recovery even if the borrower defaults. An inflated ARV creates uncertainty regardless of how good the borrower’s credit looks.

Unrealistic ARV projections represent one of the leading causes of application denial. When borrowers present assumptions unsupported by local comparable sales or inflated by 10-15 percent above market reality, lenders immediately adjust downward. This often renders the deal unworkable at the intended purchase price and leverage level.

The components lenders scrutinize include comparable sales selection and adjustment using truly comparable properties that sold recently in the same neighborhood. They want transparent adjustments for condition, features, and lot size. They verify market demand by confirming similar renovated properties actually sell within reasonable timeframes. And they favor conservative pricing that deliberately underestimates what the market will pay.

Investor and contractor discussing renovation plans inside a gutted property during a fix and flip project

How an Experienced Contractor Can Get You Approved

An experienced contractor functioning as part of your project team represents a powerful compensating factor for first-time investors with low credit. Lenders explicitly evaluate team composition and contractor credentials, viewing these as substantially offsetting inexperience and credit limitations.

The logic centers on execution risk. Hard money lenders understand that project failures often result from poor renovation management, cost overruns, and schedule delays rather than unfavorable market conditions. An experienced contractor with documented history of completing similar projects, maintaining licenses and insurance, and staying within budgets provides lenders confidence that the project will execute properly regardless of your inexperience.

Multiple lenders note that documentation of contractor credentials like licenses, insurance certificates, references, and photos of completed projects significantly strengthens applications. If your contractor is licensed and bonded, this substantially improves your chances. Similarly, having a real estate agent with local market knowledge or a mentor investor as part of the deal team can substitute for your personal experience.

For first-time investors with low credit specifically, having a contractor formally involved in the deal provides particular value. If that contractor has strong credit and real estate experience, their involvement can substantially offset your limited history. Lenders view mentorship or partnership with established investors as an acceptable substitute for independent borrower experience.

Cash Reserves: The Compensating Factor

Cash reserves and liquid assets function as a critical compensating factor in hard money lending. Reserve requirements vary based on credit score tier, borrower experience, and loan structure. Understanding these requirements is essential for first-time investors in the 600-620 credit score range.

The general industry guideline suggests borrowers should maintain 3-12 months of loan payments in liquid reserves. For first-time investors regardless of credit score, lenders typically target the higher end of this spectrum, often requiring 6-12 months. On a $300,000 fix and flip loan at 11 percent interest, monthly interest-only payments run approximately $2,750. A lender might require $16,500 to $33,000 in documented liquid reserves.

Here is where it gets interesting. A borrower with a 600 credit score plus strong cash reserves might actually receive more favorable rates than a borrower with a 700 credit score but limited reserves. This reflects lender philosophy that financial reserves demonstrate discipline and ability to handle project challenges regardless of historical credit performance. Cash reserves can partially offset credit score deficiencies.

The research also reveals that lenders distinguish between liquid reserves and general net worth. Bank statements showing immediate access to funds carry significantly more weight than retirement accounts or real estate equity that cannot be quickly accessed.

Mistakes That Get First-Time Investors Denied

Understanding the pitfalls that cause fix and flip loan denials allows you to avoid them. The most frequently cited denial reasons provide a roadmap of what lenders evaluate and what weaknesses will derail otherwise viable applications.

The most common denial cause is insufficient or unrealistic deal economics. This manifests through inflated ARV assumptions, insufficient purchase price discounts, or underestimated renovation costs. When borrowers present comparable sales that do not accurately reflect local market conditions, lenders order their own appraisals and the ARV comes in 10-15 percent below projections. This creates a funding shortfall that leaves borrowers unable to complete the project.

Poor financial projections and lacking justification rank second. Borrowers presenting round-number renovation budgets like $30,000 for full rehab without line-item detail or contractor quotes raise red flags. When lenders request detailed budgets and borrowers cannot produce them, underwriters become concerned about execution capability.

Disorganization in the application package emerges as a surprisingly frequent cause of denial. Borrowers submitting incomplete applications, failing to respond timely to document requests, or providing inconsistent information signal that they may lack project management discipline. For first-time investors already facing perception of execution risk, organizational shortcomings amplify lender concern.

Unclear or unrealistic exit strategies cause frequent denials. A borrower claiming they will refinance into conventional financing upon completion, but with a 600 credit score and no demonstrated income, presents an exit strategy lenders will challenge. Overly optimistic timelines also signal lack of real estate experience.

Documentation You Need to Have Ready

The application package you submit represents your most critical tool for influencing underwriting outcomes. Meticulous documentation can substantially improve approval odds and terms. Here is what every first-time investor with low credit should prepare.

Start with foundational documents: the loan application itself with clear, accurate personal information, identification documentation, and if using an LLC, your articles of incorporation, operating agreements, and EIN confirmation. Most hard money loans for fix and flip projects are structured as business loans to entities rather than personal loans.

Property documentation forms the core of your application. You need the purchase and sale agreement proving you have a legitimate transaction under contract. Include a preliminary title report identifying any liens or encumbrances. Add your after-repair value analysis with comparable sales from the past 3-6 months, adjustment analysis, and conservative ARV conclusion. First-time investors should obtain professional broker price opinions rather than relying on online estimation tools.

Your renovation budget needs to be detailed and contractor-verified. Rather than round numbers, submit line-item budgets including labor costs for specific work, materials costs, permits, dumpster services, and contingency allocations. Having preliminary bids from licensed contractors strengthens this substantially.

Document cash reserves with bank statements from the past 30-60 days clearly demonstrating available funds. Beyond bank statements, documentation of other liquid assets can strengthen the application. Finally, include an exit strategy summary detailing exactly how you plan to repay the loan with supporting evidence.

Can You Really Get 90% LTV With a 620 Credit Score?

Some hard money lenders advertise LTV ratios up to 90-95 percent. A first-time investor with a 620 credit score faces practical constraints in accessing these high-leverage products. The answer is nuanced: 90 percent is possible but typically constrained by loan-to-cost structures.

The critical distinction lies in how lenders structure high-leverage products. When lenders advertise 90-93 percent LTC or 75-80 percent LTV, they define these as combinations where one limit applies to purchase financing and another to rehab financing. For example, a program might offer 75 percent of purchase price plus 100 percent of rehab, totaling 93 percent of project cost but still constrained by ARV limits.

For borrowers with credit scores in the 600-620 range, accessing maximum leverage products typically requires the deal structure to be exceptionally strong with compensating factors. First-time investors accessing these products face tighter ratios than experienced flippers even when credit scores are comparable.

A realistic assessment suggests that a first-time investor with a 620 credit score should plan for 70-75 percent LTV rather than assuming access to 80-90 percent. This provides safety margin for down payment planning and ensures that if deal economics differ slightly from projections, you still remain within lender parameters.

What Low Credit Actually Costs You in Interest

The financial cost of a 600-620 credit score compared to a 700+ score represents a meaningful but quantifiable premium. Based on market data, borrowers in the 600-620 range typically face interest rates 1-2 percentage points higher than 700+ borrowers.

On a $300,000 fix and flip loan with 12-month terms, this differential translates to $3,000-$6,000 in additional annual interest expense. For a typical six-month hold period, the differential would be $1,500-$3,000. Not insignificant, but also not deal-breaking if your numbers work.

The premium is not deterministic. Borrowers with 600-620 credit scores but exceptionally strong cash reserves, conservative deal structure, and experienced contractor involvement may negotiate rates comparable to 680+ borrowers with weaker compensating factors. This flexibility reflects the asset-based nature of hard money lending where credit represents only one input among many.

Origination points follow similar patterns. Borrowers in the 600-620 range typically pay 2.5-4 points while 700+ borrowers pay 1-2 points. On a $300,000 loan, this represents $7,500-$12,000 versus $3,000-$6,000 in origination fees.

The Bottom Line for First-Time Investors

A credit score in the 600s does not prevent you from getting a fix and flip hard money loan. What determines approval is the quality of your deal, the strength of your team, your cash reserves, and how well you present everything to the lender.

The optimal strategy involves securing preliminary contractor engagement and verification documentation. Accumulate 6-12 months of intended loan payment reserves in liquid form. Develop meticulously researched ARV analysis using recent local comparables. Create detailed, contractor-verified renovation budgets with line-item detail. Define clear exit strategies supported by market data. And present complete, organized applications that demonstrate professionalism.

Borrowers following this pathway SUBSTANTIALLY improve approval odds regardless of credit challenges. Those submitting incomplete applications with weak deal analysis face denial even with stronger credit profiles. The deal matters more than the score.

Hard Money Bankers provides fast, flexible, and reliable financing solutions for real estate investors in Maryland, Virginia, DC, Pennsylvania, and surrounding states. Whether your credit is perfect or challenged, we evaluate deals on their merit. Learn more about our lending process or apply for a loan with no cost and no obligation to see what you qualify for.

The information provided here is for educational purposes only and does not constitute financial or investment advice. Always perform your own due diligence and consult with qualified professionals before making investment decisions.

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