Loan Comparison
Both loans fund work rather than a finished property, and both release money in draws. The difference is scope: a fix and flip loan finances the purchase and rehab of an existing structure with a short exit horizon, while a construction loan funds vertical building from a permitted plan set. Choosing the wrong one costs time and money.
| Fix and Flip Loan | Construction Loan | |
|---|---|---|
| What it funds | Purchase plus renovation of an existing home | Ground-up building or a full rebuild |
| Term | 6–18 months | 12–24 months |
| Underwriting basis | After-repair value (ARV) and your experience | Completed value from plans, specs, and builder budget |
| Builder requirement | Contractor bids — investor can self-manage in some cases | Licensed general contractor with signed contract |
| Exit strategy | Sell or refinance to DSCR/rental financing | Convert or refinance to a permanent mortgage |
| Payments | Interest-only on drawn funds | Interest-only on drawn funds |
| Best for | Investors flipping or repositioning a property | Owner-builders and developers building new |
Cosmetic to moderate rehab with a sale or rental refinance planned within a year? Fix and flip financing is faster and lighter on documentation. Adding square footage, rebuilding to the studs, or building on a vacant lot? You need a construction loan with a draw schedule and licensed builder. We fund both and will tell you which your scope actually falls under.
Still Deciding?
We'll price both programs with your actual numbers and show you the payment, cash to close, and long-term cost side by side — no credit pull required.
Questions
Generally no. Once you are demolishing and rebuilding, lenders treat it as ground-up construction, which requires permitted plans, a builder contract, and a construction draw schedule.
Often 7–14 days. These are asset-based loans, so speed comes from valuing the deal rather than documenting your income — which is exactly what you need to compete with cash offers.
It helps with pricing and leverage but is not always required. First-time investors typically see slightly lower loan-to-cost and higher rates until they have completed projects to show.
About Us
CDL Mortgage Services Inc. is an independent, full-service mortgage company. Instead of pushing one bank’s products, we shop multiple wholesale lenders to secure the best loan at the best rate for every borrower.
Purchase, refinance, and home equity — all under one roof, focused on the best loans at the best rates.
Based at 6524 Lonetree Blvd, Rocklin, CA 95765 and licensed in California, Texas, Georgia, Tennessee, Oklahoma & Idaho.
Every file is handled start-to-finish by a licensed loan officer who knows your name and your goals.
Fully licensed and regulated, with award-winning lender partnerships and 35+ years serving borrowers.
Ready When You Are
One application, multiple wholesale lenders, and a licensed loan officer who explains the tradeoffs before you commit.