Who are the best hard money lenders? Need money for commercial real estate or house flipping fast, but you’ve got a bad personal credit score?
A hard money loan might be the best bet for an investor like you because they are based on the value of the real estate, not personal credit.
The Best Hard Money Lenders Compared
|Company||Interest Rate||LTV Requirements||Beginner Friendly?|
|RCN Capital||9.49%+||85% of purchase price +100% renovation costs||no|
|Lima One Capital||Variable||70%||yes|
|Kiavi||7.125%+||75% of after repair value||yes|
|Do Hard Money||12%+||75%||yes|
Best Hard Money Lenders
As with more traditional loans, the main difference makers are going to be in the areas of terms, interest rates, and how much you can borrow. For hard money lending, there is a fourth area to consider: how much do you have to put up of your own money?
1. RCN Capital
RCN Capital finances fix & flip hard money loans, rental loans, and bridge loans.
Get up to $2 million in a new construction loan amount, for a term of 12 – 24 months, paying interest of 10.25% and up.
A fix & flip loan can go to $7.5 million, with 12 months to pay (extended terms available). Get up to 85% of purchase price + 100% of renovation costs. Rates start at 9.49%.
A multifamily fix & flip hard money loan goes up to $10 million, with up to 7% LTC (loan to capital). Interest rates start at 10.00%.
Note: They do not lend in Alaska, Minnesota, Nevada, North Dakota, South Dakota, or Vermont.
2. Lima One Capital
Get fix & flip new construction loans, or a rental property loan from Lima One Capital. For fix & flip, get up to 90% LTC, and 70% LTV (loan to value). Loans go up to $5 million. There are 13, 19, and 24-month term options.
Or get fixed to rent, or bridge plus loans, also to fix up properties.
For multifamily properties, you can get up to $20 million in a value-added bridge loan, or up to $10 million in long-term hold financing.
If you have a 700 FICO score or better, and twelve or more months of short time income verification, you can get a short-term rental loan.
Get a bridge loan with up to 90% LTC. Pay interest rates as low as 6.95% with a loan amount of up to $1.5 million. Get up to 75% of after-repair value, with 12, 18 & 24 mo terms with interest-only options. They will not do income or asset verification.
Kiavi also offers long-term financing for rental properties. These are adjustable-rate or thirty-year fixed mortgages. Their rates are as low as 7.125%. You can cash out up to $500,000 in four months.
Since they also work with private lender brokers, you could potentially work with a private money lender who is in turn working with Kiavi to fund their private money loans.
4. Amza Capital
With this lender, you must have a personal credit score of 650 or better. In addition, the minimum purchase price before rehab is $75,000. Get up to $2.5 million in two weeks.
Pay it back in twelve months, at interest rates of 7 – 12%. Pay $995 in closing costs. These money loans are available for first-time flippers working with a mentor and a licensed contractor, or experienced people with at least 5 flips in their history.
Or get a fix and flip credit line for up to $50 million, with loans for up to 80% of the cost.
5. Lending One
With this lender, you can get up to 90% of purchases and repairs, with up to 24 months of interest-only terms. There is no prepayment penalty. Get funded in as little as a week.
They will only lend to LLCs, corporations, limited partnerships, or general partnerships (we highly recommend incorporating). You must be an American or Canadian citizen or a permanent resident alien.
This lender will only loan for non-owner occupied properties. You must provide a list of all your rental properties (an REO Schedule).
LendingOne provides money loans in all states and the District of Columbia except Alaska, Nevada, North Dakota, South Dakota, and Utah.
6. Do Hard Money
This lender will provide 100% hard money financing. They do not demand any down payment money from you. Do Hard Money has no minimum credit score requirement and they do not require that you have any previous flipping experience.
Their 100% financing is based on your being able to secure a property for up to 75% of its after-repair value (ARV).
Interest rates start at 12%. The origination fees are as low as 3.5%. Loans go up to $350,000. There are no prepayment penalties and no payments for 5 months.
This hard money lender also provides information on other forms of financing to supplement their own loans.
7. New Silver
New Silver offers to fix and flip hard money loans for up to 10.5% in interest. Their origination fee runs from 1.875% and up. The loan-to-project cost (LTP) goes up to 90%. You can get construction financing of up to 100%.
Get Loan To ARV of up to 75% for up to $5 million, for twelve months with extensions.
You will need a FICO score of at least 650, with previous experience of two or more flips. There is no hard credit pull. New Silver offers discounts for repeat borrowers.
Or get a rental loan, although your FICO score must be at least 680.
Hard Money Funding: Positives
Since it’s based on the real estate value (before or after repair), a borrower with a poor credit report can get these loans. A hard money loan is fast, sometimes even within 24 hours of application.
There is no need for background checks. Some lenders even offer a hard money loan based on the after-repair value of a building. Hard money lenders make finance house flipping possible with these asset-based loans.
Hard Money Funding: Negatives
One of the bigger disadvantages of private money lending is the higher interest rate versus a traditional loan. The borrower may find they are stuck with an origination fee.
Interest rates can be very high, three times that of banks.
Plus the best hard money lender wants you to have some skin in the game, typically at least 10% of your own money. That way the hard money lender knows their interests are protected, because they don’t want to lose your money.
A hard money loan will also tend to not be subject to consumer lending regulations. So, caveat emptor.
1. How Can I Get 100% Financing?
There are not a ton of options for financing that do not require a down payment for real estate investing. However, some hard money lenders will get you close, if not all the way.
Of course there are non-traditional funding options also. These include borrowing from family and friends, bootstrapping, and even crowdfunding.
Some business incubators and accelerators provide funding, resources, and mentorship in exchange for equity. They can be a good option if you’re in a startup phase.
Taking on a partner that can provide capital is another option.
2. What Are Typical Hard Money Loan Requirements, Besides Property LTV?
- Exit Strategy
Lenders want to know how you plan to repay the loan. Some require a clear exit strategy, which may include selling property, refinancing, or the use of other funds.
- Credit Score
Despite being more concerned with the property’s value than credit, some hard money lenders may still consider your credit history.
Some lenders like to see borrowers with experience in real estate investing. A track record of successful projects is helpful.
- Down Payment or Equity
Though asset-based, some lenders may require borrowers to have skin in the game, so to speak. This can be either a down payment or equity in the property.
3. Can I Get a Hard Money Loan with Bad Credit?
It’s possible. These are loans that are primarily asset based, which means the lender can be more lenient when it comes to credit score. The whole point of lending to borrowers with good credit is to mitigate the risk to the lender.
Since, in the case of hard money loans, there is an asset in place for the majority of the value of the loan, there is less need for this mitigation.
However, this does not mean that hard money lenders never consider lender credit scores. Some still do take credit history into consideration. They would rather see the loan repaid than take possession of the property.
4. What Are The Hard Money Loan Monthly Payments Like?
The monthly payments on hard money loans vary greatly based on a number of factors. However, most of them are interest-only monthly payments in the short term, ending in a balloon.
The idea is that lenders pay interest in the short-term and then repay the principal in a lump sum after the property sells, or refinance the lump sum into a more traditional mortgage at the end of the hard money lending term.
Since these are typically high-interest and high-dollar loans, the monthly payments can be quite large in some cases.
Options Beyond Hard Money Lenders and Funding
Flippers and commercial real estate investors have choices beyond a hard money loan. They can try a home equity loan for flipping, or an investment property line of credit for a real estate investment. Another option is a business line of credit.
Yet another option is a cash-out refinance loan or a permanent bank loan/online mortgage. Rates and terms will vary. But for great rates, have you checked out what Credit Suite has to offer?
Check Out Real Estate Investor Financing from Credit Suite and Connect to Hard Money Lenders
The loan amount will range from $100,000 – $20,000,000. This financing can be used for refinancing a property, even if you are doing a cash-out refinance. Maximum LTV 70%.
Loan-to-values range from 55 – 65%, depending on the purpose of the loan. Plus your clients can also get SBA loans. Renovations get a loan to a value of up to 60%.
Credit Suite has funding programs available including conventional property financing, money for investment properties and hard money loans, bridge loans, and loans for the purchase of the commercial real estate.
Commercial Real Estate Financing for All Types of Buildings
Credit Suite offers financing for many different, even unique property types. Get funding for industrial offices (general or medical/dental), light manufacturing buildings, self-storage facilities, and more.
Details on Credit Suite’s Commercial Real Estate Financing Program
Approval amounts go up to $20,000,000. Bad credit is accepted. Use real estate as collateral. You will need to provide bank statements. House reseller financing or a commercial real estate loan can be a big step, let’s take it together.
The Best Hard Money Lenders? The Jury is Still Out on Whether This Form of Funding is the Best Idea
Hard money funding can be a good choice for house flippers and any commercial real estate investor who wants/needs to get money fast. But interest rates can be high, and terms can be short. Plus there is little regulation.
Credit Suite can help you get funding for commercial real estate or house flipping, with better rates and terms than you would expect.