Is this a thing, or is the underwriter making a mistake?  

Major mistake. 

@Austin Tondreau the single worst mistake my wife and I made was to pay off our student loans.

I'm glad you are doing research to avoid mistakes.1) That's not the only way to obtain estimates but for someone new to real estate that is the best way.

Many people make the mistake of going into real estate deals without enough cash.

Maybe a newbie mistake...

Please share your experience in hopes to helpothers avoid mistakes, learn , share a laugh, or just continue theirreal estate education through you!

I made the mistake of over the phone I think mentioning 1 months rent deposit. 

I have a steady income coming in as well, and could live with the mistake, absolute worst case scenario.

If you can get a hard money lender to work with you they are going to require a down payment since you don’t have the experience and if you miss estimate or make any mistakes you will have to come out of pocket to finish the project.Hard money is very expensive and can eat your profits up very quickly if you don’t know what you’re doing.