Both can put cash in your hands, but one keeps the loan on the deal and the other ties it to your home — how a fix and flip loan compares to a home equity loan or HELOC.
Investors weighing how to fund a flip often consider tapping their own home’s equity instead of using a purpose-built loan. Both can put cash in your hands, but they work very differently — and one ties the loan to your personal residence while the other keeps it on the deal. Here’s how a fix and flip loan compares to a home equity loan or HELOC.
What Each One Is
A fix and flip loan is short-term, asset-based financing secured by the investment property you’re buying. It funds both the purchase and the rehab on one loan, underwritten on the after-repair value. A home equity loan or HELOC is secured by your personal residence and lets you borrow against the equity you’ve built there, then use that cash however you like — including for a flip.
What Gets Funded
This is the biggest practical difference. A fix and flip loan funds the entire deal — up to 90% of the purchase and 100% of the rehab on a qualifying project — with the renovation released by draw. A home equity loan only gives you the cash you can pull from your own home; you’d then have to use that to cover the purchase, the rehab, and the carry yourself, which usually isn’t enough to fund a whole flip and leaves you fronting the rest.
Risk
A fix and flip loan is secured by the investment property, so the deal carries the risk. A home equity loan puts your home on the line — if the flip goes sideways, the debt is still attached to where you live. For most investors, keeping the risk on the deal rather than the residence is a meaningful advantage.
Speed and Qualification
A fix and flip loan closes in about a week to two weeks, underwritten on the property with no minimum credit score. A home equity loan or HELOC is a consumer product — it qualifies you on income and credit, takes weeks, and is capped by your personal equity. It also doesn’t come with the draw structure a renovation needs.
Fix and Flip Loan vs Home Equity at a Glance
Fix and Flip Loan vs Home Equity at a Glance
Which Should You Use?
Use a fix and flip loan to fund the actual flip — purchase plus rehab — without putting your home at risk or fronting the renovation yourself. A home equity loan can make sense as a small supplemental source (covering closing costs or reserves), but it rarely funds a flip on its own and it ties the debt to your residence. If you want to leverage equity from an investment property instead, a cash-out refinance keeps the risk on the asset. Model your flip first with our deal estimator.
Frequently Asked Questions
Usually not. A home equity loan only gives you the cash you can pull from your residence, which rarely covers the purchase, rehab, and carry. A fix and flip loan funds the entire deal — up to 90% of purchase and 100% of rehab.
It keeps the risk on the deal rather than your residence. A fix and flip loan is secured by the investment property, while a home equity loan attaches the debt to where you live.
Yes — the rehab is released through draws as the work is completed, up to 100% of the renovation budget on a qualifying deal. A home equity loan has no draw structure.
A fix and flip loan, typically in about a week to two weeks, because it’s underwritten on the property. A home equity loan or HELOC is a consumer product that qualifies you on income and takes longer.