Fix & Flip Loans

As a leading specialist in fix-and-flip financing, MMTC offers quick closings (one week in many cases), practical underwriting for investors, and lends on a variety of property types and conditions. As such, MMTC has closed many loans that did not fit the criteria or the time frames of a traditional bank or conventional lender. We offer very competitive rates and fees that allow the investor the potential to make increased profits compared to going with a traditional hard money loan which can have significantly higher fees. Our fix-and-flip loans are interest only and have no prepayment penalties. The structure and pricing of each loan are subject to underwriting and approval.

How do fix & flip loans work?

Merchants Mortgage fix-and-flip loans are designed to facilitate the acquisition and improvement of a residential investment property. As a potential borrower, below is a rough idea of what to expect as well as a few details to consider. We also suggest talking with a loan officer to give you insight into your specific situation. Here are a few noteworthy details:

  • We have the ability to underwrite and close this type of loan within 5-7 days.
  • Merchants will lend up to 90% of the purchase price of the property plus 90% of the repair budget (90% of Cost, 90% Loan To Cost (LTC)). (Subject to borrower and property qualifications.)
  • All loans are subject to a maximum 75% Loan to Value (75% of Value, 75% LTV) based on the estimated As Repaired Value. For pricing and terms, see below.
  • Apply using our online loan application and provide the requested documents.

Depending on the specific loan request, the borrower, and the property qualifications, loans may be offered at reduced LTC/LTV ratios. Each loan request is subject to underwriting, approval and the following potential factors:

  • The strength of the property.
  • Borrower’s credit, liquidity, net worth, income, and experience

Want to know more information and learn about pricing?

Ready to apply?

What are the benefits of a fix & flip loan?

  • MMTC STAFF LOAN AND EXPERIENCE: MMTC has a seasoned staff of professional loan officers and processors to assist you. We have an accessible and experienced draw department to assist with the improvement escrow draws and complete your draw requests in a timely manner. Many of our executives and employees have been with the company for over 10 years.
  • PROPERTY TYPES: We finance a variety of 1 to 4 unit property types and conditions, including but not limited to: bank owned properties, wholesaled properties, HUD foreclosures, short sales, auctioned properties, and more.
  • FAST APPROVALS AND CLOSINGS: We provide quick pre-approvals (typically within 24 to 48 hours) and quick closings (typically within one week, sometimes less). Many of our investors have secured and closed on contracts due to our speed which has allowed them to compete against other investor's that submit "all cash" contracts.
  • IMPROVEMENT FUNDS: We lend not only towards the purchase price of the property, but we also lend a percentage towards the repairs. This means you don't have to pull out of pocket funds to make all of the repairs.
  • COMPETITIVE PRICING: Our rates and fees are cheaper than many fix-and-flip lenders and can provide much better rates than traditional hard money loans.
  • DOWN PAYMENT FLEXIBILITY: We do not require that funds for down payment be seasoned and may allow gifted funds.
  • 100% FINANCING USING CROSS COLLATERAL OR DOWN PAYMENT RESERVE: If there is sufficient equity in another residential property that you already own, it may be possible to cross-collateralize to cover the down payment. 100% financing also possible through a Down Payment Reserve Account where the down payment is held by MMTC as separate collateral and the loan is made for 100% of costs (ask your loan specialist for details).
  • BORROWER FLEXIBILITY: Properties may be titled in entities, such as limited liability companies (LLC's), corporations, or partnerships. No limit on the number of investment properties already owned by the investor.
  • NO PREPAYMENT PENALTIES: There are no prepayment penalties on our fix-and-flip loans.
  • PARTIAL RELEASES: We allow partial releases on projects with more than one unit (i.e., duplexes, triplexes, four-plexes.)
  • REPEAT BORROWERS: Although borrowers must qualify for each loan that is submitted, we retain our files for repeat borrowers so if you are doing business with MMTC regularly, we only need to obtain relevant updates for new applications.

General terms:

The structure and pricing of each loan are subject to underwriting and approval, but some general pricing ranges are as follows:

Fix and Flip Loan:

Percentage Lent: Up to 90% of purchase price plus 90% of repairs (90% LTC). Also, the loan advance ratio is subject to the loan amount also being no more than 75% of the after repair appraised value of the property.
Rate: 10% (Depending on Borrower's Qualifications), Fixed Rate, Interest Only, Payment Due Monthly.
Origination Fee: 2.0% to 2.5% Origination fee plus standard closing costs outlined below. (An additional fee may apply IF cross-collateralizing for down payment in second lien position with another property).
Loan Term: 6 months with an automatic 6 month extension. The extension fee beginning in month 7 is the loan amount times .0033 per month.
Prepayment Penalty: None.
Credit Qualification: Subject to some exceptions, the credit score requirement is 680 or higher.  Merchants' underwriting is generally more investor friendly than traditional, conventional loan underwriting.

Estimated Closing Costs:

(NOTE: We do NOT charge for underwriting, document preparation or credit report!)

Appraisal: $500 A Single Unit
Processing: $385
Title Company Closing Fees: $250
Recording Fees: $150
Title Policy and Endorsements: $575
First Year Hazard Insurance Premium and Prepaid Interest: TBD

Rates and fees are subject to underwriting and approval and are subject to change without notice. Closing costs are estimated.

See our fix-and-flip example and application links for more information or to take the next steps.

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