Hard Money Loan Requirements
What lenders look for — and why the deal matters more than your credit profile.
Hard money is asset-based lending. The primary question a private lender asks is not "who is this borrower?" but "is this a good deal?" If the property has equity, the numbers work, and you have a realistic exit plan, the door is open regardless of your credit history. Here is what lenders evaluate.
Who Can Apply
Fix and Flip Investors
Buying distressed property to renovate and resell at profit. One of the most common hard money use cases.
Buy and Hold Investors
Purchasing rental property with the plan to hold for cash flow and appreciation, then refinance into long-term financing.
New Construction Developers
Building from the ground up on vacant land or after demolishing an existing structure. Residential and light commercial.
Bridge Loan Borrowers
Closing a time-sensitive purchase before a pending sale closes, or bridging to refinance once a property is stabilized.
First-Time Investors
No prior investment track record is not a disqualifier on its own, especially for straightforward deals with strong numbers.
Borrowers With Credit Issues
Past foreclosures, short sales, or poor credit are not automatic disqualifications. The property drives the decision.
Property Requirements
Property Must Have Equity
Hard money lenders typically lend up to 65-75% of the property's after repair value (ARV). The deal needs to have enough equity built in to protect both parties.
Property Must Be Non-Owner Occupied
Hard money loans are for investment property, not primary residences. Owner-occupied homes are subject to different regulations and are not eligible.
Marketable Property Type
Single-family homes, small multi-family (2-4 units), larger multifamily, mixed-use, light commercial, and vacant land with a development plan are all fundable.
Clear Title (or Path to Clear Title)
The property must have clear title at closing or a defined path to clearing it. Significant title issues may require resolution before funding.
Borrower Requirements
What Lenders Want to See in Your Exit Strategy
Hard money loans are short-term. Lenders need to know how you plan to repay the loan within the term — typically 6 to 24 months. Common exit strategies include:
- Sell the renovated or completed property at market value (fix and flip)
- Refinance into a long-term conventional or DSCR rental loan
- Sale of vacant land to a developer or end buyer
- Completion of construction and sale to a home buyer
- Payoff from pending sale of another property