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Welcome to our comprehensive guide on frequently asked questions about hard money loans. If you're seeking fast and flexible financing options, hard money loans can be a game-changer. Let's delve into the world of hard money loans and unravel the answers to your burning questions.
WHAT IS A HARD MONEY LOAN?
A hard money loan is any loan secured by a "hard" asset like commercial or residential property. It is an alternative to a traditional loan and is sometimes called a bridge loan, private capital loan or private loan. A hard money loan is a first mortgage on investment real estate. A hard money lender looks to the property as the primary collateral in addition to the borrower's credit score or other factors.
WHAT UPFRONT FEES DO YOU HAVE?
There are no upfront fees prior to issuing a commitment. We require an application and documentation showing relevant professional experience.
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WHAT IS YOUR TYPICAL CLIENT?
There is no typical client, nor is there a one-size-fits-all solution. This is why we work closely with you to tailor the loan to fit your unique needs. However, there are qualifications (credit score, 3 recent projects, cash flow, etc.) that must be met in order to secure a loan.
WHAT TYPE OF PROPERTIES DO YOU LEND ON?
We require our loans to be an entity such as a corporation or an LLC. We consider all SFR, Multi-family 2-4, and some land and commercial properties.
WHAT IS YOUR MAXIMUM/MINIMUM LOAN AMOUNT?
We lend from $200 thousand to $2.5 million depending on which of our products best fit the borrowers needs, and our assessment of the property.
WHAT IS YOUR MAXIMUM LOAN TO VALUE (LTV)?
This will depend on the property type and which product, but generally land only is 50% - 60% LTV and improved property is 70% - 75% depending on our assessment of the property. The max loan amount is a function of cost as is value and as improved value.
WHY USE A HARD MONEY LOAN?
There may be many reasons, but the primary reason we see is time. We can often close in two weeks depending on property location. Hard money loans can be used when traditional financing is not an option because of income, documentation, banking climate, etc.
WHERE DO YOU LEND?
We lend in Texas only, and generally in and around the Metro areas such as D/FW, Houston, Austin and San Antonio.
WHAT TYPES OF PROGRAMS DO YOU OFFER?
Our loans are interest-only for 6-12 months (or more by exception) depending on the product you select.
WHAT IS YOUR MINIMUM CREDIT SCORE?
We have a product with no credit score required, and we have a product with a minimum score of 660…we will assess each applicant to see which works best for them.
CAN YOU LEND TO FOREIGN NATIONALS?
Yes, in some instances.
Should you have a question not listed above, please reach out to us for more information!
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