Hard Money Loans — Fast, Asset-Based Real Estate Financing
A hard money loan is a short-term real estate loan underwritten on the property’s equity and after-repair value — not on the borrower’s personal income or credit history. The decision comes down to one question: does the deal make sense? If the property has enough equity and the exit strategy is clear, the loan closes fast — typically 7 to 10 business days.
Hard money is built for situations where conventional financing is too slow, too rigid, or disqualifying — auctions, distressed sales, value-add deals, transitional bridges, and time-sensitive opportunities.
Check Hard Money Eligibility Talk to a Hard Money Specialist — (833) 350-9185How Hard Money Is Different
Conventional mortgages take 30-45 days, require full income documentation, and rely on your credit profile. Hard money flips the equation:
| Feature | Hard Money | Conventional Loan |
|---|---|---|
| Primary underwriting | Property equity + ARV | Borrower income + credit |
| Close time | 7-10 business days | 30-45 days |
| Credit score | Flexible (minor impact) | Strict (620+ typical) |
| Income docs | Minimal | Full (tax returns, W-2s, pay stubs) |
| Term | 6-24 months typical | 15-30 years |
| LTV | Up to 65% of ARV / 75% of purchase | Up to 80%+ |
| Rate | Higher (short-term) | Lower (long-term) |
| Best for | Investors, flips, bridges, quick-close | Owner-occupied, long-term holds |
The trade-off is straightforward: you pay a higher rate for speed, flexibility, and the ability to close deals conventional lenders can’t.
When Hard Money Is the Right Tool
Fix-and-Flip Purchases
Buy a distressed property, renovate, sell within 6-12 months. Hard money funds purchase + rehab on one loan, then pays off at sale.
Auction Purchases
Auction houses typically require cash or proof of funds within 30 days. Hard money can close inside that window; conventional cannot.
Bridge Financing
You’ve sold your current property but haven’t closed on the next. Hard money bridges the gap for 3-12 months, then pays off when permanent financing is in place.
Distressed Property
Condition issues (major rehab needed, unconventional construction, non-warrantable condo) that disqualify conventional lenders. Hard money underwrites on equity and after-repair value, not habitability at time of purchase.
Quick-Close Competitive Offers
Sellers frequently accept lower-priced offers with 10-day close over higher-priced offers with 45-day close. Hard money lets you compete on timeline.
Credit-Challenged Borrowers
Recent bankruptcy, foreclosure, judgment, or low FICO that would disqualify conventional underwriting. Hard money is equity-driven — the property qualifies, not primarily the borrower.
Transitional Debt
Property needs stabilization (lease-up, renovation, tenant repositioning) before permanent financing is available. Hard money holds the deal for 12-24 months, then refinances into a DSCR loan or commercial loan .
Typical Hard Money Terms
| Feature | Typical Range |
|---|---|
| Loan amounts | $100,000 – $5,000,000+ |
| LTV (purchase) | Up to 75% of purchase price |
| LTC / LTARV | Up to 65% of After-Repair Value |
| Term | 6-24 months (interest-only typical) |
| Rate | Higher than conventional (reflects term, risk, speed) |
| Origination points | Typically 1-3 points |
| Credit minimum | Flexible — deal-driven, not score-driven |
| Income docs | Minimal |
| Appraisal | Required — often full retail appraisal + as-completed ARV |
| Exit strategy | Required — sale or refinance to permanent |
| Vesting | LLC preferred |
| Close time | 7-10 business days typical |
Sample Scenario: Fix-and-Flip in Phoenix
Property: Distressed 3BR/2BA single-family home in Phoenix, asking $225,000. Investor plans $45,000 rehab, projects $340,000 ARV.
- Purchase price: $225,000
- Rehab budget: $45,000
- Total project cost: $270,000
- ARV (after repair value): $340,000
- Hard money loan (70% of total project cost): $189,000
- Investor down payment + rehab capital: $81,000
- Term: 12 months interest-only
- Exit strategy: List for sale at $325,000-$340,000 upon completion (3-5 month rehab)
Result: Closed in 9 days. Investor completes rehab, lists, sells within 7 months, pays off hard money at close, keeps net profit after costs.
Sample Scenario: Bridge to DSCR Refinance
Property: Fourplex in Atlanta needing cosmetic rehab to reach stabilized rents. Seller wants 21-day close.
- Purchase price: $520,000
- Rehab budget: $40,000
- Hard money loan: $390,000 (75% LTV)
- Term: 12 months
- Plan: Close in 14 days, complete cosmetic rehab in 60 days, lease-up in 60 more days, refinance into permanent DSCR loan at stabilized rents.
Result: Hard money held the property through value-add period. Refinanced into 30-year DSCR loan at 75% LTV on appraised stabilized value — investor cashed out above the original hard money balance and kept the property long-term.
States We Originate Hard Money In
Investment-property hard money lending does not require state-by-state NMLS broker licensing in most jurisdictions. We originate hard money loans in all 50 U.S. states for non-owner-occupied 1-4 unit residential investment property.
Owner-occupied hard money (rare — primarily residential rescue scenarios) is subject to state licensing requirements and is only available in states where we hold NMLS broker licensing.
For 5+ unit multi-family, mixed-use, or pure commercial property, see our separate commercial real estate loans — different product, different underwriting.
Hard Money vs DSCR vs Rehab
| Feature | Hard Money | DSCR | Rehab Loans |
|---|---|---|---|
| Best for | Fast close, distressed, short-term | Stabilized rental investor | Purchase + renovation in one loan |
| Term | 6-24 months | 30 years | 12-24 months (then refi) |
| Rate | Higher | Moderate (non-QM) | Higher (includes rehab draws) |
| LTV | Up to 75% purchase / 65% ARV | Up to 80% | Up to 70% LTARV |
| Property condition | Any — habitable or distressed | Must be habitable | Distressed OK (renovation financed) |
| Close time | 7-10 days | 21-30 days | 10-14 days |
| Exit strategy required | Yes | No — permanent financing | Yes — sell or refi |
Quick guide:
- Need to close in 7-10 days? Hard money.
- Already stabilized + want long-term debt? DSCR.
- Purchase + rehab in one loan with clear exit? Rehab loan .
- Value-add multi-family (5+)? Bridge-to-perm — hard money first, then commercial .
Who Uses Hard Money
- Fix-and-flip investors funding purchase + rehab on one loan
- Auction buyers who need proof of funds + fast close
- Seasoned investors acquiring distressed properties at discount
- BRRRR investors (Buy, Rehab, Rent, Refinance, Repeat)
- Bridge buyers waiting for a sale to close
- Cash-out borrowers needing equity access faster than conventional
- Credit-challenged investors where asset quality makes up for profile
- Developers in transitional phases of larger projects
If your deal has equity and a clear exit strategy, hard money is viable — even if conventional lenders can’t help.
See If Your Deal Qualifies
Hard money decisions come down to the deal itself. Give us the basics — property value, purchase price, rehab scope, exit strategy — and we can typically quote same day.
Check Hard Money Eligibility Talk to a Hard Money Specialist — (833) 350-9185Frequently Asked Questions
Related Investment Loan Programs
- DSCR Loans — Long-term permanent financing for stabilized rental properties
- Rehab Loans — Purchase + renovation in one loan
- Bridge Loans — Gap financing between transactions
- NONI Investment Loans — Premium DSCR with cash-out flexibility
- Commercial Loans — Multi-family and commercial permanent financing
1st Nationwide Mortgage, NMLS 1281. Hard money loans are short-term investment property financing for 1-4 unit residential non-owner-occupied real estate. Subject to deal underwriting, property equity, and exit strategy review. Rates, LTV, and terms vary by program and property type. Not all applicants or properties will qualify. Owner-occupied hard money restricted to licensed states.
Ready to Get Started?
Talk to a licensed loan officer about your options — no obligation.