What is a rehab loan?

Lenders provide investors with short term financing to rehab / renovate investment properties. This financing helps the investor quickly renovate investment properties when the borrower doesn’t have enough cash to renovate with their own funds.

Line of Credit (LOC)

Investors can borrow a percentage of their investment properties home equity as a revolving line of credit


Revolving means that you can reuse the funds as often as you want. For example, if a borrower from France is issued a line of credit of $250,000 and the investor spends $50,000. The investor now has $200,000 left of the line of credit (LOC). However, if the investor pays back the $50,000 spent, the investor will then again have $250,000 ready to be deployed in the line of credit (LOC). This product is popular amongst real estate investors as it comes with lower interest rates compared to other financing options. The duration of the line of credit can be up to 30 years.


Lenders analyze numerous factors when deciding the investors who will receive funding. A few of the qualifications include the borrower having a consistent level of income, a robust credit score, strong financial health and experience as a real estate investor.

What do I do if I can’t qualify for other rehab loans?

Investors who struggle to find financing will end up going for a hard money rehab loan as these lenders will not analyze and size the loan based on the borrower’s financial health but will solely focus on the collateral the borrower has to offer. These lenders will focus on analyzing the after-repair value (ARV) of the properties and base the loan amount of the ARV. Typically, the maximum loan-to-ARV lenders will issue is 75%.


Investors can benefit tremendously from a rehab loan as it could increase their property’s value and increase the rate of appreciation. A rental property in top condition can demand a higher rent which will in turn increase the investors monthly rental income, the properties return on investment, and profitability.

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