Hard Money Loans With Bad Credit

Hard money is asset-based, so credit matters less than it does at a bank — but “less” is not “not at all.” National fix and flip lenders typically floor at 600 to 660. Below that, you are working with regional private lenders and individual investors who compensate for credit risk with lower leverage, more points and shorter terms. Here is what is realistic and how to make a low-score file fundable.

What lenders look at instead of your score

• Equity: a 25–35% down payment and a loan under 65% of ARV makes the collateral do the talking.
• The deal: a clean, well-supported spread between all-in cost and ARV.
• Experience: documented completed projects can override a thin credit file.
• Liquidity: verified reserves covering six or more months of interest.
• Credit story: medical collections or a years-old short sale read differently from recent mortgage lates or an open bankruptcy.

What it costs

Expect 10.5% to 14% interest, 2 to 4 points and a 6- to 12-month term, often with a prepaid interest reserve. On a $200,000 loan that is roughly $4,000–$8,000 in points plus $1,750–$2,300 per month in interest. Model the full cost before committing with the hard money cost calculator.

Ways to improve your terms

1. Bring a partner or co-guarantor with strong credit and experience.
2. Offer cross-collateral: a second property with equity can replace a down payment or raise leverage.
3. Clean up quick wins — pay down revolving balances below 30%, dispute errors, resolve small collections — 30 to 60 days before applying.
4. Start with a smaller, simpler project to build a track record.
5. Ask about a profit-share or joint-venture structure with a local private lender.

Frequently asked questions

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