Hard money loans are short-term, asset-based loans secured primarily by the property itself rather than your credit or income. They close faster than conventional financing and are commonly used by fix-and-flip investors, builders, and buyers who need to move quickly on a deal or bridge a gap between transactions.
Who it's for
- Fix-and-flip investors who need to close fast and start renovations quickly
- Buyers who need bridge financing between selling one property and closing on another
- Investors purchasing distressed or non-warrantable properties that don't qualify for traditional financing
- Builders and developers financing short-term construction or renovation projects
Key features
- Fast closings, often in days rather than weeks
- Underwritten primarily on the asset and the deal, not personal income documentation
- Short loan terms, typically designed to be paid off or refinanced within months to a couple of years
- Financing based on purchase price and/or after-repair value (ARV)
- Higher rates and fees than conventional financing, in exchange for speed and flexibility
