Why Fix and Flip Goes to 90% LTC and Multifamily Bridge Caps at 75%: The Risk Math Lenders Use
A sponsor running two deals in the same month — a single-family flip and a 12-unit mixed-use acquisition — will look at both term sheets and assume someone made a mistake. The flip gets financed up to 90% of cost. The multifamily deal tops out at 75% of cost, even though the sponsor’s credit and experience haven’t changed between the two files. Both are business-purpose investment loans. The gap isn’t a pricing quirk — it’s risk math, and it’s worth understanding before you size either deal.
The two leverage caps, side by side
Under our current program terms, a fix and flip loan goes up to 90% loan-to-cost for light rehab with an experienced sponsor (85% with some experience, 80% for a new investor), capped at 75% of after-repair value, with a 620 minimum FICO (650 for a first-time investor). A multifamily or mixed-use bridge loan caps at 75% loan-to-cost and 65% of after-repair value, with a 670 minimum FICO. Every figure here is indicative and subject to underwriting and credit approval — the leverage any specific file actually gets depends on the deal, the sponsor’s track record, and the asset.
| Fix and flip | Multifamily / mixed-use bridge | |
|---|---|---|
| Max loan-to-cost | Up to 90% (light rehab, experienced) | Up to 75% |
| Max after-repair value | 75% ARV | 65% ARV |
| Minimum FICO | 620 (650 for a new investor) | 670 |
| Loan size | $115K–$8M | Sized to the asset and the deal |
Running the numbers on both deals
Example one: a single-family flip with a $400,000 purchase price and $100,000 of rehab — $500,000 in total project cost. At 90% LTC, the loan is $450,000 and the sponsor brings roughly $50,000 plus closing costs. The ARV cap doesn’t bind here: if the finished value appraises at $650,000, 75% of that is $487,500, comfortably above the $450,000 LTC number. Loan-to-cost is the controlling ratio.
Example two: a 12-unit mixed-use acquisition with a $2,200,000 purchase price and $500,000 of capital improvements — $2,700,000 in total project cost. At 75% LTC, the loan is $2,025,000 and the sponsor brings $675,000. But if the stabilized value only appraises at $3,000,000, the 65% ARV cap allows just $1,950,000 — now the lower of the two numbers, and the one that actually controls the loan amount. The sponsor’s real contribution jumps to $750,000, not $675,000.
That’s the arithmetic lesson multifamily sponsors miss most often. On a flip, loan-to-cost is usually the binding constraint, because ARV on a renovated single-family house tends to run well ahead of total cost. On a multifamily or mixed-use bridge, the lower ARV percentage frequently binds first, especially when the rehab or capex budget is a small share of total project cost. Run both ratios against your actual numbers before you commit to a purchase price — don’t assume the headline LTC is what you’ll get.
Why the risk math is different, not just the percentage
Three things separate the two programs, and each one pushes multifamily leverage down relative to a single-family flip.
Exit liquidity. A renovated single-family house sells into the deepest, most liquid residential resale market in the country. A 12-unit mixed-use building sells, or refinances, into a commercial buyer and lender pool that moves slower and prices on cap rate and in-place income, not comparable sales. A bridge-to-DSCR refinance exit also has to clear a debt yield test the lender can underwrite against actual numbers today, not a pro forma — a second ratio a fix-and-flip loan simply doesn’t have.
Execution risk scales with unit count. A scope overrun on one kitchen costs a few thousand dollars and a couple of weeks. A scope overrun across twelve units, or a vacancy problem that hits several units at once during a lease-up, moves real money and real timeline, and it compounds across every unit still unfinished.
The collateral is income, not just a future sale. On a flip, the lender is underwriting a resale. On a multifamily or mixed-use deal, the lender is underwriting rent rolls, lease-up assumptions, and — on the mixed-use side — commercial tenancy, where a vacant ground-floor retail space changes the file in a way a single vacant residential unit doesn’t. The higher 670 FICO floor reflects a larger loan, a longer hold, and more moving parts between closing and takeout.
When this is the wrong call
Don’t assume the ceiling number is what you’ll be offered. If the sponsor has no multifamily or mixed-use track record, pricing and leverage on that first deal typically come in below the 75% headline, sized to the file rather than promised upfront. If after-repair or stabilized value comes in lower than your pro forma assumed, the 65% ARV cap bites harder than the LTC number — get a third-party opinion of value before you sign a purchase agreement at a stretched price, not after. And if a mixed-use building’s commercial component is a majority of the square footage or the income, it may need to be underwritten as a commercial asset on different terms entirely rather than under the standard multifamily bridge program — talk to us before assuming these numbers apply.
If a deal only works at the absolute ceiling leverage on both ratios, with no cushion anywhere, that’s usually a sign to renegotiate the purchase price rather than push the file past what underwriting will actually support.
The takeaway
Easy Lending USA finances both programs, and the gap between a 90% flip and a 75% multifamily bridge isn’t arbitrary — it’s the same underwriting discipline applied to two different risk profiles. Know which ratio binds on your deal, run the arithmetic before you make an offer, and size your cash-to-close against the lower of the two numbers, not the one that sounds better in the listing. See current terms on our fix and flip program and our multifamily and mixed-use bridge program, or check the full rate sheet for the latest indicative figures before you underwrite a deal yourself.