How do you handle deals where the borrower's FICO is 620 but everything else is strong?

Ingrid, this is exactly the kind of deal where experience matters more than the score. At Cho Capital, we have a "track record override" for borrowers with 10+ completed projects. We'll go down to 600 FICO if the experience is documented and the LTV is conservative. Key: you need to document the track record thoroughly. HUD-1s or closing statements on the completed flips, not just a list. DM me.

Ingrid, the presentation matters a lot here. Lead with the track record, not the FICO. I'd structure the executive summary as: 1. Borrower overview: 15 years, 12 flips, [X] total profit generated 2. Deal overview: strong market, 35% equity, clean collateral 3. FICO context: [explain what caused the lower score if known — medical, divorce, business issue?] Lenders who do experienced investor programs will appreciate the context. Don't bury the FICO but don't lead with it either.

35% down with that track record? Should be placeable. Just need the right lender.

what caused the 620? that matters a lot for how lenders will view it. medical debt is very different from mortgage lates

@Keisha — medical debt from 2022. No mortgage lates ever. Diana — DMing you now. Marcus — that presentation structure is exactly what I needed, thank you!

Medical debt with no mortgage lates is very different from credit mismanagement. Most experienced lenders understand this. Be transparent about it in the narrative.

This is a classic scenario we see, and it's where private capital often shines compared to institutional lenders. For us at Novak Capital, FICO is a data point, not a deal-breaker, especially when it's explained. A 620 FICO due to medical debt, with a clean mortgage history and 15 years of successful real estate investing, tells a very different story than a 720 FICO with recent mortgage lates and no experience. We'd look at that 35% down payment as a strong indicator of commitment and equity protection. For a fix-and-flip, we're primarily underwriting the asset and the borrower's ability to execute. Your borrower's 12 successful flips in 3 years is golden. We'd likely offer a loan around 65% LTV on the purchase, maybe 70-75% LTC on the rehab, depending on the scope. The FICO might add 25-50 basis points to the rate, but it wouldn't prevent funding. Transparency is key – present the full picture upfront.

This is a great question and one we see frequently. For us at Mitchell Bridge Fund, a 620 FICO isn't an automatic decline, especially with the other strong indicators you've listed. We're a private fund, so we have more flexibility than traditional banks. We'd definitely look beyond the score. The 35% down payment is huge, as it shows significant borrower equity and commitment. We'd want to understand the FICO dip – medical debt, as Bill mentioned, is very different from recent mortgage lates or bankruptcies. We’d also verify those 12 successful flips and the borrower's overall liquidity. If they have sufficient cash reserves to cover the project and some cushion, that mitigates risk significantly. We might price the loan slightly higher, say 10.5% instead of 9.5%, to account for the FICO, but the deal would absolutely be on the table. Experience and equity often outweigh a FICO hiccup for us.

This is a great scenario, and honestly, it's where a good broker earns their keep. I've had a few similar deals. For a fix & flip, that 35% down is huge. Most lenders, even with a 620 FICO, will be much more comfortable at 65% LTV, especially with 12 successful flips. That track record is gold. I'd package this by highlighting the 65% LTV, the Denver market, and then dedicating a paragraph to the borrower's experience and the *why* behind the FICO. Is it medical? A past business issue that's now resolved? I've seen lenders go down to 600-610 FICO for experienced flippers on a 60-65% LTV. What's the projected ARV and rehab budget? Are they looking for a full 100% rehab draw or do they have some of that cash too? That also plays a role.

This is a classic scenario, and honestly, it's where the value of a strong broker really shines. We see this often, especially with experienced investors who might have taken a hit during a market correction or had a personal event that dinged their FICO, but their operational history is solid. For these, we immediately pivot from conventional or even typical hard money lenders to more relationship-based private capital or smaller regional banks that are portfolio lenders. We just closed a similar fix-and-flip in Phoenix. Borrower had a 630 FICO, but 10+ successful flips and 40% equity. We packaged it by focusing on the 12-month exit strategy, the 65% LTV, and a detailed breakdown of their last 5 projects' profit margins. We also included a letter from their general contractor vouching for their project management. It's about telling the full story, not just the FICO score. We've even started using a specific section in our CRM to track these 'story' elements for each borrower, so my team knows exactly how to position them when we're shopping deals.

This is a classic scenario we see all the time, and honestly, it's where you can really shine as a broker. A 620 FICO isn't ideal, but with 15 years experience and 12 successful flips, that's a track record that screams 'low risk' to the right lender. For a fix & flip, that 35% down payment is huge. I've had success with similar deals, often looking at lenders who prioritize asset quality and sponsor experience over FICO for bridge or fix & flip. Some will even go down to 600 or 620 FICO if the LTV is 60-65% and the borrower has a strong history. I'd package this with a detailed resume of their past projects, showing purchase price, rehab budget, and sale price for those 12 flips. Have you checked their credit report for *why* the FICO is 620? Sometimes it's minor stuff that's easily explained, or even a recent hit that's already recovering. That context can make a big difference.

This is such a great question, and honestly, I just ran into something super similar last month! My borrower had a 630 FICO, but like yours, had a ton of experience and a strong down payment. For a fix-and-flip loan, I found that many private lenders and hard money lenders were actually pretty flexible if the LTV was low enough. We ended up getting a 70% LTC loan, which meant about 30% down from the borrower, and the lender was okay with the FICO because the exit strategy was clear and the property itself was strong. The interest rate was a bit higher, around 11.5%, compared to what a 700+ FICO might get, but the borrower was happy to pay for the access to capital. I did have to really emphasize their 10+ flips in the last 5 years and how they always sold quickly. Do you find that some lenders are more open to explaining *why* they're okay with a lower FICO, or is it usually just a 'yes' or 'no' based on their internal matrix?

This is a common one, and frankly, a 620 FICO isn't a deal-breaker for us, especially with that kind of experience and equity. We're private money, so we focus heavily on the asset and the borrower's proven track record. For a fix-and-flip loan, 35% down is excellent – that's a 65% LTV, which is well within our comfort zone. The 15 years of experience and 12 successful flips in 3 years tell me this borrower knows what they're doing. We'd look at their rehab budget and timeline, but the FICO alone wouldn't sink it. We'd likely price it a bit higher than someone with a 700+ FICO, maybe 10.99% instead of 9.99%, and perhaps a 2-point origination instead of 1.5. But the deal would get done. The key is demonstrating that the FICO hit was an isolated incident or due to a strategic move, not a pattern of poor financial management. We prioritize the ability to execute and exit over a credit score that might not reflect current capacity.