In 2026, California fix and flip loans generally fund 80–90% of purchase + up to 100% of rehab, capped at 65–75% of ARV (the lesser of the two). Rates ~8–14%, 1–3 points, 6–18 month interest-only terms, 620+ credit, no tax returns, rehab released via a draw schedule, close in 5–14 days. Figures are illustrative for 2026.
The core numbers (2026)
| Requirement | Typical 2026 range* |
|---|---|
| Loan-to-Cost — purchase | 80–90% |
| Renovation financing | Up to 100% (via draws) |
| ARV cap (LTARV) | 65–75% of after-repair value |
| Rate | ~8–14% (experienced 9.5–11.5%) |
| Points | ~1–3 |
| Term | 6–18 mo (12 typical), interest-only |
| Credit | 620+ (640+ better, 720+ best) |
| Income docs | None — no tax returns/DTI |
| Close | 5–14 days |
| Exit | Sell, or refi to DSCR (BRRRR) |
*Illustrative for 2026; set by individual lenders and vary by borrower, experience, and deal. Not an offer. See how rates price →
How the loan is sized — the lesser of two caps
Every flip loan runs two calculations and funds the lower one:
1. Loan-to-Cost (LTC)
- 80–90% of the purchase price
- + up to 100% of the rehab budget
- Your "skin in the game" is the rest
2. ARV cap (LTARV)
- Total loan ≤ 65–75% of ARV
- Protects the lender if the market softens
- Often the binding constraint
The 70% rule
The classic screen every flipper uses before making an offer:
Max Purchase Price = (ARV × 0.70) − Rehab Costs
Example: ARV $800,000, rehab $100,000 → max purchase = ($800,000 × 0.70) − $100,000 = $460,000. The 30% margin covers financing, holding, and selling costs plus your profit. Experienced flippers flex to 65–75% by market — tighter in fast Bay Area corridors, closer to 65% in slower Central Valley areas.
Draws & how interest is charged
- Rehab draw schedule — renovation funds are held back and released in stages tied to milestones, usually as reimbursement draws (pay the contractor, submit receipts, get reimbursed).
- Dutch interest — interest accrues on the full loan, including undrawn rehab, from day one.
- Non-Dutch interest — interest only on funds actually disbursed. Cheaper carry; always ask which structure you're being quoted.
Documents you need
| Document | Why |
|---|---|
| Purchase contract | Defines the deal & price |
| Scope of work / rehab budget | Sizes the renovation & draws |
| ARV support (comps) | Sets the ARV cap |
| Proof of funds (cash to close) | Down payment & reserves |
| Entity docs | Business-purpose vesting |
| Flip resume (if any) | Experience tier & pricing |
Reviewed by the licensing team at Save Financial, a California-licensed mortgage brokerage (NMLS #377740, DRE #01875766) founded in 2009 and serving all 58 counties from offices in Newport Beach and Marina del Rey.