What Is a Hard Money Loan?
A hard money loan is a short-term, asset-based loan for real estate investors doing fix-and-flip projects or bridge financing. Based on the property's after-repair value (ARV) rather than credit or income.
Hard Money Loan Rates & Terms
Hard money rates: 10-15% (sometimes 18%+). Terms: 6-24 months. Origination fees (points): 2-5% paid upfront. Interest usually paid monthly (interest-only). LTV: 65-75% of ARV.
How Does a Hard Money Loan Work?
Lenders evaluate the deal based on after-repair value. You provide scope of work and rehab budget. Interest-only payments during rehab. Principal paid back when property sells. Speed is key — closing in 5-10 days vs. 30-45 for conventional.
Key Features of Our Hard Money Loan
Points & Fees
See origination points and closing costs breakdown
Total Cost of Capital
Understand true cost including all fees
✅ Pros
- Fast closing (5-10 days)
- Approval based on deal, not personal finances
- Can finance distressed properties
- Interest-only payments during rehab
⚠️ Cons
- Very high rates (10-15%+)
- Origination points add 2-5% cost
- Short terms create pressure to sell
- If flip fails, you owe full loan
Hard Money Loan vs Alternatives
Hard Money Loan vs FHA 203k Rehab Loan
Lower rates (5-7%) but requires owner-occupancy, longer closing, stricter qualification. Hard money is faster and for investors but much more expensive.
Hard Money Loan vs Bridge Loan
Bridge loans are similar (short-term, higher rates) but for homeowners buying before selling. Hard money is for investors doing fix-and-flip.
How to Qualify for a Hard Money Loan
Lenders care most about the deal: good property at good price with solid rehab plan and realistic ARV. Credit score 600+ typical. Cash reserves for payments and overruns. Skin in the game: 10-25%.