Frequently Asked Questions

A hard money loan is a short-term loan secured by real property, funded by private investors rather than banks. The "hard" refers to the hard asset — the property itself. Approval is based primarily on the property's value and your deal quality, not your income or credit score. Typical terms are 6-24 months with interest-only payments. See how the process works →

Hard money comes from organized lending companies with set rates and standardized processes. Private money comes from individual investors — friends, family, or private individuals — with fully negotiable terms. Hard money is more structured and faster to access; private money is more flexible but harder to find and less predictable.

Your exit strategy is your plan for repaying the loan. Common strategies include selling the property after renovation (fix and flip), refinancing into a conventional mortgage (BRRRR method), or refinancing into a DSCR loan for long-term rental hold. Lenders require a clear exit strategy before approving your loan.

LTV (Loan-to-Value) is the loan amount divided by the property's current value. For example, a $140,000 loan on a $200,000 property = 70% LTV. ARV (After-Repair Value) is the estimated value after renovations are complete. Lenders typically loan 65-75% of ARV or 70-80% of as-is value.

Most hard money lenders are flexible on credit. Scores as low as 580-600 can qualify. The primary approval factors are the property value, your deal quality, and your exit strategy. Better credit will generally get you better rates, but it's not the make-or-break factor.

Yes. Hard money lenders focus on the deal, not your credit history. If the property value supports the loan and you have a clear exit strategy, many lenders will work with borrowers who have lower credit scores, recent bankruptcies, or other credit events that would disqualify them at a bank.

Most lenders run a soft credit pull, which does not affect your credit score. Credit is considered as one factor but is not the primary approval criteria. The property value, your experience, and the deal fundamentals matter much more.

For the initial application: property address, purchase price, estimated rehab budget, and your exit strategy. That's it — no tax returns, no pay stubs, no W-2 forms required upfront. Additional documentation may be requested during underwriting, but it's far less than what banks require. Apply in 2 minutes →

Most investment properties qualify: single family homes, multi-family (2-4 units and 5+ units), commercial properties, mixed-use buildings, and land or lots. Hard money loans are primarily for investment properties — not primary residences (see below).

It's rare and heavily regulated. Most hard money loans are for investment properties only. Some lenders offer consumer-purpose hard money for primary residences, but these require additional disclosures, cooling-off periods, and compliance with federal lending laws (TILA/RESPA).

Interest rates typically range from 9% to 14% annually in 2026, plus 1-3 origination points (1 point = 1% of the loan amount). Your rate depends on the deal quality, LTV ratio, your experience level, and the specific lender. Read our full rates guide →

Typically 10-25% of the purchase price. Experienced investors with strong track records may qualify for up to 90% of purchase price plus 100% of rehab costs — meaning as little as 10% out-of-pocket plus closing costs.

Most hard money loans do not have prepayment penalties, meaning you can pay off the loan early without extra fees. Some lenders may require a minimum interest period (e.g., 3 months of interest regardless of when you pay off). Always confirm this before signing your loan documents.

Most hard money loans close in 7-14 business days. Some lenders can close in as few as 5 days for repeat borrowers with clean deals and clear title. Compare this to 30-60 days for conventional bank loans. See the full process →

Most lenders offer loan extensions of 3-6 months for a fee (typically 0.5-1 origination point). If you cannot repay or extend, the lender may begin foreclosure proceedings. Having a solid exit strategy — and a backup plan — before borrowing is critical to protecting your investment.