After a tough year in 2025 with narrower margins, higher costs, and delayed exits, the fix & flip markets starts 2026 off with new hope. Predictions for the industry are that things will stabilize as interest rates level off and investors feel better in general about the market. Still though, underwriting is still strict. According to ATTOM's Q1 2025 data, average gross returns dropped to about 25%. This shows how even slight delays in execution can hurt fix & flip profits.
For brokers, getting fix-and-flip financing now depends on making deals that are easy to understand, go smoothly, and end on time. To preserve deal performance and set up more financeable scenarios, you need to know the standards and approval criteria for today's fix & flip loans.
ATTOM statistics showed that the average gross profit per flip dropped to the mid-$60,000 range in early 2025. This was down from more than $73,000 just a year earlier. Days on the market, on the other hand, went from about 45 to more than 70 in several cities.
Those demands changed how underwriters acted. Lenders are still willing to finance deals, but approvals are increasingly based on execution risk rather than optimism. That's why underwriting rules for fix & flip lending have gotten more rigid, relying on experience and certainty of strong returns.
Setting expectations early helps brokers avoid problems later on.
Most lenders prefer residential properties that can be quickly renovated and easily resold. Under conventional rules for fix & flip loans, acceptable collateral usually includes:
Minimum property value is important. For instance, a lot of programs require 1–4 unit properties to be worth at least $100,000 and larger multifamily buildings to be worth at least $375,000.
If the type or location of the asset makes it hard to sell, the borrower will have a more difficult time securing a loan.
ARV is still the most important factor in getting a fix & flip loan, but the assumptions must be true. Lenders want conservative comps based on recent sales, not prices at their highest.
Across most programs in 2026:
Deals that depend on extreme ARV predictions or small margin buffers are getting more attention.
In today's market, one of the most crucial prerequisites for fix & flip eligibility is a proven track record of execution.
Leverage is frequently based on deal experience over the last three years, usually in the same state as the property in question:
This framework protects both the lender and the borrower by making sure that the arrangement suits the level of difficulty the borrower is used to.
The scope of the renovation is no longer a soft variable. Lenders now explicitly group projects by risk:
As rehab gets harder, leverage gets tighter. Projects that are designated as heavy rehab need more liquidity, more experience, and more cautious ARV estimates to stay financeable.
While fix & flip lending is asset-focused, borrower fundamentals still matter.
Most programs entering 2026 require:
Weak liquidity is one of the most common reasons a fix & flip loan will get turned down or have its terms changed.
Every deal must answer one question clearly: how does this loan get paid off?
Whether the exit is resale or refinance, lenders expect:
When exits are unclear or based on speculation, they add additional risk, especially in a market where deadlines are more important than appreciation.
Brokers can save time by identifying red flags early. Deals struggle to qualify when they include:
These problems go against the rules for modern fix & flip loans and will make securing financing more difficult.
The market in early 2026 continues to support strict underwriting for fix & flip loans. Because of lower margins and longer resale times, lenders look at deals in terms of execution risk instead of predicted appreciation.
When homes are on the market for longer periods of time, usually between 45 and 75 days (or more), you need to be more careful about your exit assumptions. Deals that can be financed must still be profitable even if they take longer to hold or have conservative resale prices.
Market selection is also becoming a bigger part of the criteria for underwriting fix & flip deals. Lenders like areas with job growth, population expansion, and less competition. On the other hand, markets with too much supply or falling demand are more scrutinized. Geographic discipline helps make sure that the value added by renovations is greater than the problems in the wider market.
The most successful brokers in 2026 focus on packaging, not pushing leverage. Strong submissions include:
This approach will help loans get approved faster and protects long-term borrower relationships.
RCN Capital helps brokers all around the country with fix & flip programs that work in the real world. RCN Capital supports brokers by using experience-based leverage, structured rehab categories, and ARV discipline. Financing programs are designed to:
This structure allows brokers to focus on quality deals—not damage control.
Are you ready to make your fix & flip business stronger in 2026? Check out RCN Capital's broker program to see how working with a seasoned direct lender may help you develop transactions that can be financed, lower fallout, and help repeat investors grow.