Fix and flip finance, sized on what the house will be worth.

A fix and flip loan funds the purchase of a property and its renovation in a single facility, structured around the fact that the asset is worth considerably more finished than it's today. Conventional lenders won't touch a house that fails habitability standards, which is precisely the kind of property this strategy depends on. These are business-purpose loans on non-owner-occupied property, so they sit outside the consumer ability-to-repay rule and document far more lightly than a residential mortgage.

After-Repair Value and the Draw Schedule

The number that governs everything is after-repair value: what the property is expected to be worth once the scheduled work is complete, established by an appraiser working from your scope and comparable finished sales. Lenders express their limit as a percentage of that figure, often alongside a separate cap on the purchase price. Renovation funds aren't advanced at closing - they're released in draws as work is completed and inspected, which means you finance each stage yourself and are reimbursed. Investors underestimate that working capital requirement more than any other part of the structure. Build a genuine contingency into the budget and be honest about the timeline, because interest accrues throughout and a project that runs three months long is materially less profitable than the spreadsheet suggested.

If you would like to explore whether a fix and flip loan matches your purchase price, credit profile and long-term budget, reach out to 3E Lending to speak with our licensed Texas mortgage team in Katy.