Renovation plans rarely survive contact with an actual property without some adjustment along the way. This can mean an unexpected repair or a decision to upgrade part of the original scope. Fix flip change orders are how lenders formally handle these mid-project revisions. Additionally, understanding the process ahead of time prevents delays when a change becomes necessary. This entry covers what to expect when a project’s scope shifts.
What Counts as Fix Flip Change Orders #
A change order covers any meaningful revision to the original scope of work or budget approved at closing. This includes adding a repair nobody planned for, upgrading materials, or dropping a line item that turns out to be unnecessary. Fix flip change orders can move in either direction. Sometimes they raise the total project cost. Other times, they lower it.
Why Lenders Require Formal Documentation #
Because renovation funds typically flow through a draw schedule tied to the originally approved scope, an undocumented change creates a mismatch between what the lender approved and what is actually going into the property. Therefore, lenders generally require a written change order describing the revision and the cost impact, along with an updated budget, before releasing the next draw. This ensures that every dollar disbursed still lines up with the current, approved plan.
When a Change Increases the Budget #
If a change order pushes the total project cost beyond what the loan was originally sized to cover, the investor generally funds that difference out of pocket. This is because the loan amount does not automatically expand to match a larger budget. In some cases, if the increase is modest and the deal still supports it, a lender may consider adjusting the loan. However, this gets evaluated case by case rather than assumed.
Keeping the Project Moving #
A change order most often causes a delay simply because nobody submitted it before the next draw request. This leaves the lender unable to verify the completed work against an outdated budget. Submitting change orders as soon as you make a scope decision, rather than waiting until the next draw comes due, keeps the draw schedule on track. This also avoids unnecessary back and forth.
Summary #
Fix flip change orders are a normal part of nearly every renovation project. Lenders build a process around them precisely because scope and budget shifts happen often. Keeping change orders documented and submitted promptly protects the draw schedule. This keeps everyone, the lender, the contractor, and the investor, working from the same current plan.