gap financing can also be used in purchase/rehab lending to fill the "gap" between the borrower's down payment, and the amount lent by the 1st lien holder, or rehab lender. typically rehab lenders will only go to 65-70% arv (after repair value), so if the borrower is bringing 10% into the deal, the gap funder would provide the other 20-25%, and take a 2nd position lien and often a portion of the profit.