Cash to close on a hard money loan: the purchase gap plus the lender's charges

The cash-to-close waterfall

This site's calculators and the iPhone app estimate the borrower's cash to close with one rule. The lender's charges come out of the acquisition advance, and the borrower covers whatever part of the price the remaining proceeds don't.

Two examples, both run through the engine. The fix-and-flip example is a $185,000 purchase with a $70,000 rehab and a $340,000 ARV under a 90% LTC / 70% LTARV program with no as-is limit; LTC binds at $229,500. The Maple Ave example is the app's own test deal, where As-Is LTV binds at $280,000.

There's no fixed down payment percentage. The borrower's share of the price falls out of the sizing. On the flip, the lender lends 90% of cost, yet the purchase gap is 13.78% of the price: the $25,500 of cost the borrower funds is all spent on the purchase, because the lender funds the whole rehab through draws. On Maple Ave, where the as-is limit binds, the gap is 40% of the price.

On both examples, points are the largest lender charge. A point is one percent of the loan amount (the CFPB's definition, written for consumer mortgages, page reviewed October 19, 2023), and here it's charged on the total loan, holdback included. Published medians move: the NPLA's June 2026 Private Lending Market Report, prepared with SFR Analytics and Private Lender Law, put the median on fix-and-flip and bridge loans at 0.98 points, while SFR Analytics' March 2026 data showed a median of 2.0. Both rest on lender-submitted data, and the sample varies from report to report. On the flip, 0.98 points instead of 2 would cut cash at closing from $31,385.00 to $29,044.10. Compare quotes in the hard money points calculator.

The closing loan is smaller than the total loan

The loan amount on the term sheet and the money available at closing are different numbers. On the fix-and-flip example:

Total loan

$229,500

Less rehab holdbackReleased in draws after closing

−$70,000

Acquisition advance (the closing loan)

$159,500

Less points and lender fee

−$5,885.00

Net loan proceeds at closing

$153,615.00

A borrower who plans around the $229,500 figure will be $70,000 short at the closing table, because the holdback is paid out only as the work is done and inspected. That's also why the rehab budget doesn't appear in the cash formula when the lender funds 100% of it: rehab is paid from draws, not at closing. The rehab holdback guide builds the full closing statement.

Interest isn't in the estimate either, because regular interest accrues after closing and is paid monthly or at payoff. The exception is an interest reserve, which the lender withholds from the advance at closing. Withholding 3 months of the flip's initial monthly interest ($4,386.24) would raise cash at closing from $31,385.00 to $35,771.24, dollar for dollar. See interest reserves for how they're sized.

Estimate your deal's cash to close

The calculator opens on the fix-and-flip example. Replace the deal and the lender's terms with yours; the “Borrower cash at closing” block shows the same waterfall line by line and updates as you type. For the rehab-first view with draw dates up front, use the fix and flip loan calculator.

The example deal is an illustration, not a standard program. Calculations are estimates based on the inputs entered; this is not a quote, approval or commitment to lend.

Costs to add separately

The estimate covers the purchase gap and the lender's own charges. Everything else on the settlement statement comes on top. Gather these from the title or escrow company's estimate and the lender's fee sheet:

These depend on the property, the county and the lender's fee schedule rather than on the loan math, which is why neither the calculators nor the app include them. Prorations and credits on the settlement statement can move the final figure in either direction.

Rehab cash on top of closing

Two situations put more of the borrower's cash into the deal than the closing figure shows.

The lender funds less than 100% of the rehab

The unfunded share comes from the borrower during the project. On Maple Ave with rehab funded at 80%, the holdback falls to $80,000 and the advance rises to $200,000 (the as-is limit still binds at $280,000), so cash at closing drops from $125,600.00 to $105,600.00. The borrower then pays $20,000 of the rehab directly. The total doesn't change; the timing does.

Draws reimburse work already done

In the draw process Kiavi and Anchor Loans describe, holdback money is released after the work is completed and inspected, so the borrower pays for each stage first. On the flip, the first $25,000 draw is scheduled 43 days after the Nov 2, 2026 closing. If the borrower pays for that stage before it's reimbursed, peak cash in the deal is $31,385.00 + $25,000 = $56,385.00, before third-party costs.

When lender charges exceed the advance

On a heavy rehab with a low as-is value, the acquisition advance can be smaller than the points and fees. The engine then lets net proceeds go below zero and adds the shortfall to cash at closing. Take a $100,000 purchase, $110,000 as-is value, $75,000 rehab and $260,000 ARV, with 70% As-Is LTV, 90% LTC and 70% LTARV limits, 2 points and a $1,295.00 fee:

Total loanLimited by As-Is LTV

$77,000

Rehab holdback

$75,000

Acquisition advance

$2,000

Points and lender fee

$2,835.00

Net loan proceeds at closingCharges exceed the advance by $835.00

$0.00

Estimated cash at closing

$100,835.00

The charges use up the whole $2,000 advance, so the borrower pays the full $100,000 price plus the $835.00 by which the charges exceed the advance: $100,835.00. Nothing is netted against the holdback, which stays reserved for draws. The calculators flag this case with a note under the cash block. It's also a sign the deal is close to the point where the whole loan becomes holdback, which the rehab holdback guide works through.