Hard Money Loans
When traditional financing isn't available, a hard money loan may be your best solution
Hard Money Loans — Quick Reference
- Second and vacation homes, investment property, and commercial property are eligible. Primary, owner-occupied homes must meet certain exemptions to qualify. Call for info.
- Property title vested in a Corp, LLC, LLP, or trust are eligible
- Borrow up to 65% of the conservative value of your second home, vacation home, or investment property for purchase, refinance, or cash-out purposes (no owner-occ primary residences unless the transaction meets specific exceptions)
- 1st and 2nd mortgage loans available
- Rates from 8.50% to 14.99%
- SFR, condo / townhome, 2-4 units, apartments, mixed-use and commercial income property are acceptable collateral
- Good credit isn't required
- Close in less time than a bank loan
- Read "What Will A Hard Money Loan Cost Me "
- Residential hard money loans limited to California only (Commercial income property hard money loans available nationwide)
- Minimum hard money residential loan is $50,000
- No "cash-out" loans on lots or land
- No residential rehab loans based on "after repaired value" (current AS-IS value only)
- Homes on leased land do not qualify
- All loans underwritten on a case-by-case basis
Our minimum hard money loan amounts and general guidelines can be found on our guidelines page.
Hard money loans are equity-based real estate loans made by private lenders rather than banks.
Hard money loans are NOT a substitute for traditional bank financing.
Low rates, low fees = Bank Loan
Quicker closing, less red tape = Hard Money
The purpose of a hard money loan is to provide a more efficient, shorter term loan at a premium price when conventional financing isn't possible.
Read My Blog:
"What Will A Hard Money Loan Cost Me "
Use a Hard Money loan to:
- Purchase investment or secondary real estate — with a sufficient down payment plus closing costs
- Refinance a loan on a second home or investment property — obtain cash from equity, pay off a balloon or delinquent loan to prevent a foreclosure
- Secure a 2nd mortgage on a second home or investment property — cash out for debt consolidation, remodeling, repairs, business loans, investments, or for any reason
- Obtain a bridge loan to purchase other real estate prior to selling your current property based on the equity in the departing residence (with a new property under contract)
- Stabilize or renovate commercial income property -- for commercial apartments, offices, retail, medical, and mixed-use income properties when renovations are required, or to provide interim capital or bridge money prior to permanent financing
You may qualify for a Hard Money loan, even if:
- You have average or poor credit, minimal credit, or NO credit — sufficient equity and the means to repay the loan are more important than your personal credit
- You have a recent bankruptcy, foreclosure, or divorce -- these issues are acceptable for hard money lending with sufficient equity and the means to repay the loan
- You have too much debt to qualify for a bank loan — with the necessary equity in your property and the ability to repay the loan higher debt-income ratios are OK
- You've been on your job for less than two years. Provided your employment is expected to continue a new job is OK
- You have inconsistent or mixed income — income can be from different sources and still be acceptable
- Title to your property is held in the name of a trust, LLC, or corporation — title to the property can be vested in a non-natural person
- You need a business loan secured by equity in real estate, but are unable to qualify for a commercial bank or SBA loan
- You are a Foreign National with no U.S. employment or SSN and aren't able to secure a conventional loan
The right properties for Hard Money loans
- 1 - 4 unit second homes, vacation homes, and investment SFR, condos and townhomes. Primary 1 - 4 unit hard money transactions must meet specific guidelines.
- Property with title vested in a corporation, LLC, LLP are OK
- Apartment Buildings (5+ units)
- Mobile Home Parks
- Office and Medical Buildings
- Multi-Unit Retail
- Mixed-Use Properties
- Hotels and Motels, Resorts
- Athletic Clubs
- Restaurants & Taverns
- Dry Cleaners
- Car Washes
Interest rates, terms, and points for Hard Money loans
- Interest rates vary between 9.50%* and 14.99%*, depending on a number of factors
- Maximum Loan-to-Value ("LTV") depends on location of property and other factors. Areas where property values continue to deteriorate due to excessive short sales, REOs, and foreclosures most often won't qualify for maximum loan-to-value of 65%.
- Points and Fees ALWAYS apply. The percentage of fees for hard money loans varies based on a number of factors.
- Terms vary between 3 months and 20 years. Payments are generally interest-only. An early prepayment penalty, if any, may apply.
- Points vary per transaction depending on a number of factors and applicable state law.
- An Appraisal is almost always required, the cost of which is paid C.O.D. at the time of service.
- More info
* Indicates the Note rate, not APR.
Trust an expert in hard money lending
I've been providing hard money loans for residential and commercial properties in California for over a decade. Following the collapse of the real estate economy in 2007 many conventional loan brokers looking to replace lost business flocked to this niche market claiming to be hard money lenders, but there are few that understand what it takes to successfully close these transactions in today's climate. Call me today for a personal consultation and assesment of your situation.