Hard Money Loans - Hard Money Lending
A hard money loan is a secured, short-term loan funded by private investors or companies, not traditional banks, that is backed by real estate as collateral. Unlike traditional loans, hard money loans prioritize the property’s value over the borrower’s creditworthiness, allowing for faster approval and funding but carrying higher interest rates and fees. They are often used by real estate investors for short-term projects like “fix-and-flip” properties or to bridge financing gaps.
Advantages: Minimum to no credit requirements, No income verification in most instances, fast closings (as fast as a few days), short to mid loan terms, interest only payments.
Disadvantages: Higher interest rates, Balloon payments due at end of term, short term loan period, higher costs when compared to conventional and Non QM loans.
| Rate Range | 9%-11.95% |
| Term | 12-84 Months |
| Loan-to-Value (LTV) | Typically 65% (up to 75% for approved collateral) | 65% Max Refinance and cashout. |
| Credit Score | Various options, Includes no score requirement (in S. Florida), otherwise min 600+ (investor specific) |
| Loan Sizes | $250K - $30MM (larger loan sizes reserved for metro markets). |
| Property Types | SFR, 2-4 units, Cross Collateral (up to 35 units), condo, townhome, rural property, mobile home parks |
| Prepayment Penalty | Ranging from none to term of the loan |
| Citizenship | All citizenship status types accepted including foreign nationals (RON options available) |
| First-time-home-buyer | Yes! |