Rates ~9.5–15% · Points 1.5–4 · LTV 65–75% as-is / 70–75% ARV · Term 6–24 mo interest-only + balloon · Close 5–14 days · Credit often flexible · Investment only · Exit required. Full detail on Requirements & Rates.
The basics
What is a hard money loan?
A short-term, asset-based loan secured by real estate and funded by private or portfolio lenders. It's underwritten on the property's value and your exit — not your income — and used for investment deals like flips and bridges.
Who lends hard money?
Private lenders, portfolio lenders, and funds — not traditional banks. A broker connects you to the right one for your deal and shops the terms.
Why is it called "hard" money?
The loan is secured by a "hard" asset — the real estate itself — which is the lender's primary security rather than your creditworthiness.
Is hard money the same as a bridge loan?
They overlap. Hard money is often used as a bridge, but "bridge" describes the purpose (spanning a gap) while "hard money" describes the asset-based structure. See bridge loans.
What is a hard money loan used for?
Fix-and-flips, bridge financing, quick closes, auction purchases, value-add rentals, and cash-out on investment property.
Cost & terms
What are 2026 hard money rates in California?
Generally ~9.5–15%. Experienced residential flips often 9–12%; construction/higher-risk toward 12–15%. CA prices lower than many states thanks to competition.
How many points will I pay?
Typically 1.5–4 points (most 2–3), each equal to 1% of the loan, paid at closing.
What LTV can I get?
65–75% of as-is value, or 70–75% of ARV on rehabs; loan-to-cost up to 85–90% within the ARV cap.
What's the typical term?
6–24 months (12 most common), interest-only with a balloon at maturity.
Are payments interest-only?
Usually yes — you pay interest monthly and repay the full principal via your exit (sale or refinance) at maturity.
What does "100% financing" mean?
100% of cost (purchase + rehab), available only when the total stays under the ARV cap — not 100% of value. Reserves are still required.
Are there prepayment penalties?
Often none or minimal on short hard money — an advantage for quick flips. Confirm per lender.
Qualifying
Do I need good credit?
Often not — many lenders have no minimum and focus on the asset. Some set a 600–620 floor; stronger credit prices better.
Does my income matter?
No — hard money is asset-based, so there's no income or DTI check. Great for self-employed and portfolio investors.
Can a first-time investor qualify?
Yes, with a solid deal, reserves, and a clear plan — though a first flip usually prices ~1–2% higher. See eligibility.
Do I need an LLC?
Usually — most hard money is business-purpose and vests in an LLC or corporation.
What property types qualify?
Non-owner-occupied SFR, condos, townhomes, 2–4 unit, small multifamily, and select commercial/land. Not primary residences.
Exit & process
What's an exit strategy?
Your repayment plan — sell after renovation or refinance into permanent financing like a DSCR loan. Required before funding.
Can I refinance out of hard money?
Yes — a common exit. Stabilize, then refi into a lower-rate DSCR or conventional loan.
How fast can it close?
Often 5–14 days, sometimes 3–5 — the core advantage over a bank's 30–45.
What documents do I need?
Purchase contract, scope of work/budget, proof of funds, borrower resume, entity docs, and an appraisal or BPO. No tax returns. See the process.
What happens if I can't repay at maturity?
You may negotiate an extension (with fees) or refinance; worst case, the lender can foreclose since the property secures the loan. Plan a realistic timeline and reserves.
Reviewed by the licensing team at Save Financial, a California-licensed mortgage brokerage (NMLS #377740, DRE #01875766) founded in 2009 and serving all 58 counties from offices in Newport Beach and Marina del Rey.