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| Residential "Hard Money" Loans |
 Our residential private hard money loans are mortgage loans that are funded by private investors and are generally short-term loans (6 months to 3 years) used to purchase non-owner occupied investment properties until the property can be renovated, sold, or conventional financing can be established.
Since most types of hard money loans are equity based, they are quite different than conventional mortgage loans, which are largely based on your personal credit, income, and other assets. In fact, one of the best aspects of hard money loans and a big reason why they are so popular with real estate investors is that the borrower is not required to meet specific criteria, income ratios, and credit worthiness to qualify for a hard money loan. To qualify, generally the only thing that is required is that the hard money deal is essentially a good investment for both the borrower and the investor / lender.
Advantages of Hard Money Loans
- Up to 100% FINANCING
- NO CREDIT CHECKS are required
- NO MONTHLY PAYMENT options are available.
- NO qualifying under conventional mortgage lending guidelines.
- Purchase properties in any condition (ugly houses, not-so-ugly houses, foreclosures, etc.)
- Financing in as little as 48 hours (Great for REO and Bank Foreclosure Properties!)
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General Residential Hard Money Lending Criteria & Rates
- Loan Amounts: From $100,000 - $5,000,000+
- Rates: 12%-18% + 3-8 points
- Terms: 6 months to 3 years - Interest Only
- Max LTV: 70% LTV - Depends on property type and improvements
- Property Locations: We typically specialize in funding hard money loans for single family and multi-family residences within Arizona, California, and Nevada, however for loan amounts greater than $1.5M, we finance hard money projects nationwide.
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Types of Residential Hard Money Loans
- Hard Money Bridge Loans
Bridge loans are the most common type of hard money loans. A hard money bridge loan is a loan that is used for a short period of time until permanent financing can be arranged. These types of hard money loans are commonly used for...
- Purchasing Investment Properties
- Purchasing Foreclosure / Bank-Owned REO Properties
- Purchasing Preforeclosure Properties (Foreclosure "Bail-Outs")
- Acquisition and Development
- Construction Loans
- Spec-Home Construction Loans
We have specifically good deals on hard money spec-home construction financing with interest rates as low 12%, maximum loan amounts to $600,000, and max LTV's at 70%!
- Asset-Based or "Cross-Collateral" Hard Money Loans
These types of hard money loans can be used for any purpose but require collateral , such as other or additional non-owner occupied investment properties, for security.
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Tips for Putting Together a Good Hard Money Deal
Since hard money loans are funded by individual investors, there are generally no set lending guidelines. Hard money deals are approved or denied on a case-by-case basis, therefore it is important to have all the information needed by the hard money lender and to know what that lender's general criteria is. Applying for a hard money loan can be more like preparing a business proposal than applying for a conventional home mortgage. Generally, the more information you have on the property, yourself, your business plan, and how you "package" that information, the better chances you stand of having your hard money loan request approved. Here are some tips that can help...
- Have a great deal - not just a good deal, but a great deal. While some hard money lenders and investors say they will loan up to 65% or 70% of a home's current value, given current market conditions, most are in all actuallity only funding up to 55% or 60% loan-to-value (LTV).
- Have at least 10% of the total costs to put towards the deal yourself.
- Prepare an "Executive Summary" which should include...
- Your overall business plan from start to finish.
- A proforma / cost-breakdown detailing all costs (or good estimates) and where each dollar is coming from and going towards.
- A personal and/or business financial statement detailing your net worth and account balances or "reserves".
- Property photos and aerial or satelite photographs showing the property and surrounding area (Try Google Maps or Google Earth).
- Comparable property sales prices / values within a 1-2 mile radius.
- A previous appraisal if one is available. (although a new one will sometimes be required before the loan funds)
- Any architectural designs, renderings, or plans if suitable.
- An exit strategy detailing exactly how long you need the loan for and how you intend on repaying the loan at or before the end of the loan term.
- A personal resume with information on yourself as well as any previous experience doing what you intend to do with the hard money loan.
- Complete a mortgage application (1003) and give authorization to run a credit report. This can be helpful and is usually required for many reasons, but especially in determining if you could potentially refinance into a conventional mortgage after the project is completed should that be what you want to do or need to do when the time comes. Good income and credit isn't a must, but it always helps.
- "Package" and sell the deal - People like neatly organized and bright, shiny things. Loan officers and hard money lenders are no different. The more information you have on the deal and the more complete and organized it is, the better your chances. Anticipate what questions you would have if you someone came to you with this project and include the answers.
Not ALL of this information is always needed and it doesn't have to be perfect. I personally have financed deals in which we have funded 100% of a home's purchase price and rehab costs for an individual with a 433 credit score. Some information won't be required or you just simply won't have... but every little bit helps. Even if the information is bad or you don't think you will meet one or two of the requirements, its still a good idea to include the information up front. Some of the time we can work with you to come up with solutions to whatever problem you might have. Remember - we don't get paid by turning deals away...
If you have any questions regarding putting together hard money deals or what information is needed, please do not hesitate to send us an email or give Josh Miller a call at (520) 360-7360
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Joshua C. Miller
Loan Officer
(520)360-7360
Josh@JCMillerMortgage.com
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Francine Martineau
Loan Officer
(520)358-9382
Francine@ NovaHomeLoans.com
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