How private lenders actually underwrite a deal (it's not your credit score)
Credit pulls, tax returns, W-2s, most of what conventional lenders obsess over barely moves the needle in private capital. Here is what is actually on the desk during a deal review.
It's not your credit score
Every time a builder walks into a first call with us, they brace for the credit conversation. They have spent the morning logging into Experian. They have got a story ready for the 28-day late from 2022.
We do not run a hard pull on the first call. Most private lenders do not.
A private lender is not underwriting you the way a bank does. The credit pull happens, but it is used to flag fraud and disqualifying patterns, not to score you against a chart. By the time we even ask for the score, we have already decided whether the deal is worth pursuing.
That decision is made on three things, in this order. Asset. Exit. Sponsor.
What gets underwritten in the first 10 minutes?
Before the docs request, before the credit pull, before anything that looks like underwriting in the traditional sense, there is a ten-minute conversation that determines whether your deal moves forward.
We are listening for three answers.
What is the asset, and is the value defensible? If it is a fix-and-flip, what is the comp set? If it is a ground-up build, what is the plan and the lot basis? If it is a refi, why this property?
How are you getting out? Selling it? Refinancing into a DSCR loan? Stabilizing for cash flow? Every private lender prices the loan against the exit, because that is how the loan gets paid back.
Who are you, and have you done this before? Not your W-2. Not your tax returns. Have you executed a deal like this, and what happened.
If those three answers hold up, the rest of underwriting is mostly confirmation. If any one of them is shaky, the rest of underwriting becomes about how shaky.
The three questions, in one view:
| What we ask | What we're listening for | What strengthens the answer |
|---|---|---|
| The asset | Is the value defensible, comps, plan, lot basis? | A conservative floor, not an aggressive upside |
| The exit | How does the loan get paid back, sale, DSCR refi, stabilized hold? | The comp set, days-on-market, and a conservative net |
| The sponsor | Have you executed a deal like this, and what happened? | Receipts on the last deals, or a conservative plan, tight GC contract, real reserves |
How do private lenders underwrite the asset?
A private lender's worst case is owning the property. Every line on the term sheet. LTV, LTC, reserves, draws, is built around what happens if it goes to that. So the asset has to make sense not just to you, but to the lender's view of the worst week.
We look at the comps you used, then we pull our own. We look at what the property would resell at in a forced timeline. We look at the rehab plan and whether the budget actually lines up with what the comps support.
When the asset thesis is clean, the rest moves quickly. When it is not, you will feel the deal slow down, questions multiply, the LTV creeps down, points creep up. That is not paperwork drag. That is the lender pricing in uncertainty about the asset.
The fastest path through underwriting is a tight, defensible asset case. Do not lead with how aggressive the upside is. Lead with how conservative the floor is.
How do private lenders underwrite the exit?
The single most underrated part of a private lending application is the exit narrative. We have seen plenty of borrowers with strong assets and clean sponsorship history get stuck for weeks because their exit story did not hold up.
Selling? Show us the comp set you would list at, the days-on-market in that ZIP, and what your conservative net is after fees and carry.
Refinancing? Show us which DSCR product you are pricing, what the projected NOI would be, and what LTV you would need.
Holding? Show us the rent comps, vacancy assumptions, and the math at conservative occupancy.
A weak exit narrative is not always a deal-killer, but it always lowers your terms. Stronger exit, fewer points, better LTV. It compounds.
How do private lenders underwrite the sponsor?
Sponsor underwriting at a private lender does not look like sponsor underwriting at an institutional fund. We are not asking for an OM. We are not asking for a track-record deck.
We are asking, have you done this before, and what happened.
A first-time builder is not disqualified. A builder with two completed flips in the last 18 months gets a different read than a builder with one ground-up project that ran nine months over schedule, even if both have the same credit and the same liquidity.
The point is not to gatekeep first-timers. The point is that exit timing depends on execution, and execution depends on the sponsor. Lenders price that risk.
What helps a first-timer: a clear, conservative plan, a tight GC contract, and the willingness to put in real reserves. What helps an experienced operator: showing the receipts on the last two deals.
What you cannot fake
Skin in the game.
Every credible private lender will check that the borrower has real money in the deal, typically 15 to 30 percent of cost, depending on the program. This is not a number we negotiate down because the borrower's projections are optimistic.
The reason is simple. A borrower with 25 percent of cost on the line works harder, sells faster, and absorbs cost overruns differently than a borrower with three percent. The exit math is sensitive to it.
When a borrower asks for a high-leverage program with thin reserves, what they are really asking for is for the lender to take the position the borrower will not.
That answer is almost always no. Even when the asset is great and the sponsor is experienced, if the borrower will not take the position, the lender should not either.
If you are sitting on a deal right now
There is a two-minute version of this whole conversation on our fit-check tool. It asks the same three questions we would ask on a call, asset, exit, sponsor, and tells you whether the structure plausibly works before you spend a week chasing terms.
If the read is encouraging, the next step is a real conversation. If the read is honest about gaps, you save the week.
The programs behind the numbers.
Construction Loans
Capital structured around draws, trades, and real site sequencing.
See typical termsFix & Flip Loans
Acquisition + rehab capital sized around ARV and exit strategy.
See typical termsBridge Loans
Bridge capital up to 75% LTV, a typical ~14-business-day close for qualified, complete files.
See typical terms
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NexWin Capital Corp. (NMLS ID 2743839 · DFPI License No. 60DBO-211586) brokers loans through licensed lending partners. All funding is subject to borrower profile, collateral, documentation, and lender criteria. Nothing on this page is an offer or commitment to lend. Rates, terms, and program availability vary and may change without notice.