Looking for Lender Guidance on $20K Seller Credit Deal Structure

[Chris McDaniel]

Hi BP Community,

I’m working on a deal in Houston/Pasadena, TX and could use some insight from those with experience.

• Purchase Price: $185K
• Seller Credit: $20K applied toward rehab at closing
• Effective Net Purchase: $165K
• ARV (conservative): $220K – $230K
• Rehab Budget: ~$20K–$25K (HVAC, bathrooms, floors, cosmetics)
• Exit: Refi into DSCR or conventional in 12–18 months

I’m trying to confirm with lenders how the $20K seller credit will be treated:

1. Will hard money lenders allow this structure and apply the credit directly to rehab?
2. If not, how do I best position this so it’s workable?
3. Any recommendations for investor-friendly lenders (HML or DSCR) in Houston that have handled seller credit situations?

Goal is to make this a clean BRRRR deal with minimal cash in. Appreciate any advice or lender recommendations!

Thanks in advance!

— Christopher McDaniel

[Chris Seveney]

Typically credited it as cash required to close as long as appraisal comes in clean. 
you would still need rehab funds or get financing on those:

I would be concerned about refinance as the ltv when renovation is complete is very high and DSCR typically on refinance may not go as high as you need