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Checklist for Evaluating Hard Money Loan Proposals (2026)
By Jason Taken · Principal, Jaken Finance Group
Hard money loan comparison checklist for 2026 — LTC, ARV, points, draw schedule, extension policy, and lender red flags before you sign a term sheet.
Two term sheets can look similar on rate — and produce $15,000+ swings in net spread once you account for leverage caps, draw friction, extension cost, and hidden fees. Use this 2026 checklist before you commit to a hard money lender.
Pair it with red flags to avoid and model carry in the fix and flip calculator.
Pre-flight: is hard money the right product?
| Deal type | Hard money fit |
|---|---|
| Distressed acquisition + rehab | Yes |
| Auction without inspection | Yes |
| BRRRR buy/rehab phase | Yes |
| Stabilized 30-year hold | No — use DSCR |
| Owner-occupied | No — investment property only |
Product comparison: hard money vs conventional.
Checklist: lender credibility
- Track record — funded deals in your asset class (flip, BRRRR, multi)
- Transparent term sheet — rate, points, fees, extension policy in writing
- Direct lender or broker — know who underwrites and funds
- Draw process documented — milestone schedule, inspection turnaround
- References — other investors in your market, not just website testimonials
- Licensed / compliant — entity registration and state disclosures where required
Proof of execution: case studies hub. Compare operators: Jaken Finance Group vs Kiavi.
Checklist: leverage and deal math
Hard money caps you at the lower of LTC and ARV — verify both:
| Metric | 2026 typical | Your term sheet |
|---|---|---|
| LTC | 85%–90% | _____ % |
| ARV cap | 70%–75% | _____ % |
| Rehab holdback | 100% of approved scope | $_____ |
| Initial advance | Purchase portion at close | $_____ |
- ARV supported by sold comps within 0.5–1 mile — not aspirational list prices
- Rehab budget matches line-item scope of work
- Down payment + liquidity reserve covers 3+ months IO carry
- Exit modeled with 7%–9% sale friction
Approval criteria context: demystifying hard money approval.
Checklist: rate, points, and fees
Do not compare rate alone. Build total cost at exit:
| Line item | Ask the lender |
|---|---|
| Interest rate | _____ % IO — on what balance? |
| Origination points | _____ % of loan amount |
| Underwriting / doc fee | $_____ |
| Appraisal | $_____ — who orders? |
| Draw inspection fee | $_____ per draw |
| Extension fee | _____ % or flat — how many months? |
| Default rate | _____ % if you miss maturity |
- All fees itemized on term sheet — no “TBD at closing”
- No large upfront fee before conditional approval
- Extension policy clear before you close — not negotiated under pressure
- Prepayment penalty none (standard on investor hard money)
Run numbers: fix and flip calculator.
Checklist: timeline and execution
| Milestone | Target (2026) | Lender commitment |
|---|---|---|
| Term sheet issued | 24–48 hrs on complete file | _____ |
| Conditional approval | 2–3 business days | _____ |
| Close | 7–14 business days | _____ |
| First draw turnaround | 3–5 business days post-inspection | _____ |
- Named contact with direct phone/email — not a ticket queue
- Conditions list provided upfront — application process
- Appraisal or BPO timeline stated in writing
- Draw process aligned with fix-and-flip draw guide
Checklist: loan terms and exit flexibility
- Term matches project timeline + 60–90 day sale buffer
- Interest-only — confirm no unexpected amortization
- Extension available — cost and notice period documented
- Guaranty scope — full recourse vs carve-outs understood
- Cross-default clauses reviewed if you hold multiple loans
- Exit path defined — sale, DSCR refi, or bridge
Side-by-side comparison template
Copy this table when comparing two or more proposals:
| Factor | Lender A | Lender B |
|---|---|---|
| LTC / ARV cap | ||
| Rate + points | ||
| Total fees at close | ||
| Rehab holdback | ||
| Close timeline | ||
| Extension cost | ||
| Draw inspection fee | ||
| Est. IO carry (project months) | ||
| Est. net spread after exit |
The lowest rate loses if leverage is 5% lower or draws lag three weeks behind your GC schedule.
After you choose a lender
- Submit complete file — contract, comps, scope, entity docs, liquidity
- Lock term sheet before appraisal spend where possible
- Track budget weekly — hard money mistakes to avoid
Next steps
- Pre-qualify — get a term sheet to run through this checklist
- Read 5 benefits of hard money
- Download the fix-and-flip financing ebook
Get a Term Sheet · What is a hard money loan · (833) 264-7776
| Gate | This article |
|---|---|
| Deal type | Hard money fit |
| Distressed acquisition + rehab | Yes |
| Auction without inspection | Yes |
| Gate | This article |
|---|---|
| Deal type | Hard money fit |
| Distressed acquisition + rehab | Yes |
| Auction without inspection | Yes |
Checklist for Evaluating Hard Money Loan Proposals (2026) — deal snapshot from this article (2026)
Reconcile Pre-flight: is hard money the right product? against $15,000 all-in before you increase scope — carry at 8.99%–13.5% IO burns spread each month the file sits idle. | Auction without inspection | Yes |
Reconcile Pre-flight: is hard money the right product? against $15,000 all-in before you increase scope — carry at 8.99%–13.5% IO burns spread each month the file sits idle. | Auction without inspection | Yes |
Reconcile Pre-flight: is hard money the right product? against $15,000 all-in before you increase scope — carry at 8.99%–13.5% IO burns spread each month the file sits idle.
Reconcile Pre-flight: is hard money the right product? against $15,000 all-in before you increase scope — carry at 8.99%–13.5% IO burns spread each month the file sits idle.
Reconcile Pre-flight: is hard money the right product? against $15,000 all-in before you increase scope — carry at 8.99%–13.5% IO burns spread each month the file sits idle. | Auction without inspection | Yes |
Reconcile Pre-flight: is hard money the right product? against $15,000 all-in before you increase scope — carry at 8.99%–13.5% IO burns spread each month the file sits idle.
Reconcile Pre-flight: is hard money the right product? against $15,000 all-in before you increase scope — carry at 8.99%–13.5% IO burns spread each month the file sits idle.
Checklist for Evaluating Hard Money Loan Proposals (2026) — next step (2026)
Model flip spread after 8% sale costs and DSCR at 1.0+ before you lock scope — dual-exit files survive 2026 carry pressure.
Submit scenario · Pre-qualify · (833) 264-7776.
Rates, terms and conditions offered only to qualified borrowers. Jaken Finance Group only finances non-owner occupied investment properties.