What is a Hard Money Loan Exactly?

Generally accepted, a Hard Money Loan (is an asset-based loan, which means the financing is based on the Loan to Value (LTV) of the Asset. Unlike the traditional financing, it doesn’t go through full underwriting and there’s no minimum FICO requirement for the borrower, as it doesn’t have many guidelines and criteria.

This type of loan doesn’t have as many restrictions as one might think considering that it’s just money, so no more having to worry about bankruptcies, foreclosures, collections, etc.​

The majority prospective borrowers are private individuals or investors looking for better financing options on their investment property that they cannot obtain with a traditional lender. The only options available for real estate investors are to reach out to conventional institutions (banks), mortgage companies, and direct private money lenders.

However, if you are a real estate investor with bad credit, many of the traditional funding sources would not be valid options. There are multiple loan options out there for personal finance or real estate financing, and many of them heavily base whether or not they will give someone a loan based on their credit score. Thankfully, this isn’t true for Hard Money Loans.

Most banks and mortgage companies do not offer mortgage loan programs for individuals with low credit scores. Fortunately, in the world of private money lenders, a Hard Money Bridge Loan is a perfect option to receive funding and even fix your credit score.

Due to the lack of guidelines and underwriting, a true Hard Money Loan is generally capped at 75% LTV or less. For example, let’s say you have a home worth $1M, if you want $500K against it (50% LTV), you’re able to receive the money within 1-2 weeks (from day of application), commonly as a first lean position - because it’s just money. It’s normally in the form of a Bridge Loan, which is short term financing in a period of 12-24 months.​

Nationwide Hard Money Loan Overview

  • Rates Starting at 7.25%

  • Loan Amount : $100K – $5M

  • LTV Ratio: Up to 75% LTV (can go higher based on qualifications)

  • Blanket Loan Options Available

  • Single-Family, Condos, Townhomes, Multi-Family, Commercial, Mixed Use, Office, Retail, Industrial, Warehouse

  • Fixed rates/Adjustable

  • 9-24 Month Terms

  • Interest Only Payments

  • Purchase, Refinance, or Cash Out

  • Foreign Nationals Eligible

  • No Prepayment Penalty Option Available

​