Most deals don’t fall apart because the numbers are bad. They fall apart because of the gap: the down payment, the rehab dollars the loan doesn’t cover, or closing costs that come in higher than expected. That’s why we’ve partnered with GapFunded, giving real estate investors one more way to explore gap funding while we focus on what we do best: the first-position loan.
- We size your first-position loan through our programs first, so you know the real size of the gap.
- Then you can explore gap funding for real estate investors through GapFunded, an outside funding-coordination partner.
- Any borrowed down payment must be approved by your senior lender and fully disclosed.
- Nothing here is a guarantee of approval, rates, limits, savings or timing.
How gap funding works with Levine Capital: first position first, then the gap
The order matters. Sizing the senior loan first keeps you from borrowing more than you need and keeps your financing clean.
We size your first-position loan
Fix and flip, DSCR rental, ground-up, bridge or commercial: we structure the senior loan through our programs, so you see exactly what’s covered.
You explore the gap
With a real number in hand, you can look at gap-funding options through GapFunded, our external funding-coordination partner.
You review before deciding
GapFunded handles its own application, and its third-party lenders set final terms. You decide if an offer fits your deal.
Where the gap comes from: a fix and flip example
Fix and flip gap funding questions usually start the same way: the loan looks great, but the cash needed to close is bigger than planned. Here’s how that happens.
Illustrative example only, not a quote
| Purchase price | $200,000 |
| Rehab budget | $60,000 |
| Hypothetical loan: 85% of purchase + 100% of rehab | $230,000 |
| Down payment (15% of purchase) | $30,000 |
| Estimated closing costs, points and reserves | $12,000 |
| Cash the investor needs to bring | $42,000 |
Numbers are hypothetical and for illustration. Actual leverage, costs and terms depend on the deal, the borrower and program guidelines.
If the investor has $25,000 liquid, the gap is roughly $17,000. Knowing that figure before shopping for outside funds is the whole point of doing the first-position loan first. On a rental, the same logic applies to a DSCR loan down payment: the senior loan sets the required equity, and the difference is what you’d look to cover.
Who GapFunded is (and isn’t)
GapFunded is an external funding-coordination provider. It is not a bank or a direct lender. Its program options are arranged through third-party lenders, and those lenders decide eligibility, underwriting and final terms.
Levine Capital doesn’t take the GapFunded application and doesn’t make the credit decision on those products. We may earn a referral commission at no extra cost to you, and a referral discount may be available through us. Confirm eligibility, pricing and terms directly with GapFunded.
Down payment gap funding options you can explore
These are categories, not quotes or promises. Each has a benefit and a trade-off.
Gap funding
Benefit: can help cover a down payment, rehab gap or closing costs.
Watch out: repayment and personal-guarantee obligations may apply, even when unsecured.
0% credit stacking
Benefit: introductory 0% offers can lower early carrying costs.
Watch out: offers are limited and issuer-specific; a regular APR may apply later, inquiries are possible, and some exclude balance transfers or cash advances.
HELOC
Benefit: a line secured by property you already own.
Watch out: default can put that property at risk, and variable rates can change your payment.
Business line of credit
Benefit: flexible access up to an approved limit.
Watch out: check repayment frequency, fees, collateral and any personal guarantee.
Debt consolidation
Benefit: can simplify payments or free up monthly cash flow.
Watch out: a longer term or fees can raise the total cost.
A closer look at credit stacking for real estate
Credit stacking real estate investors use typically means opening several new credit lines in a short window. It can be fast and flexible, but each account adds a payment, inquiries can affect your score, and intro rates can reset. Ask how the new payments will affect your debt-to-income and cash flow before you start.
Play it straight with your senior lender
This is the part investors sometimes skip, and it’s the part that protects your deal:
- Your senior lender must approve borrowed down-payment funds or any credit stacking where required.
- Disclose every source of funds. Never hide borrowed money or assume a DSCR or other lender will accept it.
- Understand the risks of credit stacking. Several new accounts mean new payments, possible inquiries and rates that can reset after an intro period.
When you work with us first, we’ll talk through how a borrowed down payment fits our programs before you apply for anything elsewhere.
Which first-position loan fits your deal?
The gap depends on the senior loan, so start there:
- Fix and flip loans for purchase-plus-rehab projects, and our guide to fix and flip and gap funding.
- DSCR 2nd-lien rental loans for investors who want to pull equity from a cash-flowing rental.
- Ground-up construction loans for new builds.
- Need a letter to make an offer? Request proof of funds.
- Brokers can bring client deals through our broker program.
Questions worth asking before you accept any gap funding
- Who is the lender, and what product am I actually being offered?
- What are the APR, fees, repayment schedule and total cost?
- Is there a lien, collateral or personal guarantee?
- How will this new payment affect my existing financing and my deal’s cash flow?
Gap funding FAQ
Is GapFunded the lender?
No. GapFunded coordinates funding through third-party lenders, who set eligibility and terms.
Does Levine Capital fund the gap itself?
Our focus is the first-position loan. For the gap, we point you to GapFunded so you can explore outside options.
Can I use borrowed funds for my down payment on a Levine loan?
Only if it’s approved under our program guidelines and fully disclosed. Talk to us before you apply for gap funds.
Why size the first-position loan before looking for gap funding?
The senior loan determines how much cash you need to bring. Sizing it first shows the real gap, so you don’t borrow more than you need.
Is approval guaranteed?
No. There’s no guarantee of approval, rate, credit limit, savings or timing. Each lender makes its own decision.
Start with the loan, then solve the gap
Get your first-position numbers, then review your gap funding options.
This article is for education only and isn’t a credit offer, loan terms or financial advice. Program rules vary by lender. Levine Capital may earn a referral commission from GapFunded at no extra cost to you.
