Hard money lenders offer short-term loans to purchase and renovate properties. With more than 600 hard money lenders in the U.S., it’s hard to find a reputable lender that’s right for you. To help, we looked at a range of hard money lenders and compared the top six below, including their rates, terms, and qualifications.
| Hard Money Lenders | |
|---|---|
| LendingHome | (Best Overall) Investors looking for low-rate, fast hard money loans for residential fix and flips |
| Visio Lending | Best overall long-term loans ideal for a cash out refinance and buy-and-hold investors |
| Patch of Land | Fix-and-flip investors looking for a valid alternative to LendingHome, but with a commercial component |
| CoreVest | Fix and flippers who are taking on a larger residential fix-and-flip project with up to $100 million in financing |
| Lima One Capital | Short-term investors looking for a good residential fix-and-flip hard money loan option |
| Finance of America Commercial | Investors who want to purchase, develop and/or flip commercial real estate |
How We Determined the Best Hard Money Lenders
Fix-and-flip investors are the most likely candidates for hard money loans. These investors need both residential and commercial loans that have short terms, fund fast, and can be repaid quickly without many holding costs or prepayment penalties. However, long-term investors can also benefit from hard money loans since they can use them to renovate or season a property before refinancing to a longer-term loan.
We determined the top hard money lender by looking at the following criteria:
- Rates and fees charged: Hard money lenders typically charge higher interest rates (between 7.5% and 12%+) as well as various origination fees, all of which can affect holding costs and profitability.
- Loan terms: Hard money loan terms are usually 1 – 3 years, and some lenders don’t have any prepayment penalties for early repayment.
- Hard money loan qualifications: Most hard money lenders require a minimum credit score of around 550, and place most of the qualifications on the property itself as well as the investor’s background and experience.
- Customer service: The best national hard money lenders are typically online lenders who offer a higher level of customer service than more traditional hard money lenders.
- Funding time: The best hard money lenders can fund in roughly 10-15 days, allowing both short- and long-term investors to compete with all-cash buyers and close deals quickly.
Best Overall Hard Money Lender: LendingHome
Our recommendation for the best hard money lender is LendingHome. They offer a higher LTV and ARV than most of the other lenders on our list, at 90% and 75%, respectively. They also offer competitive interest rates for prime borrowers and more lenient qualifications than the other lenders, since their minimum credit score is generally 550 or higher. Further, LendingHome charges only a small number of lending fees and conduct their own appraisals at no additional cost to the borrower.
LendingHome Rates, Terms & Qualifications
LendingHome offers low interest rates starting at 7.5%, which is low compared to industry averages. However, it’s not uncommon to receive an interest rate between 9% and 12%. They charge lender fees between 1.5% and 2.5%, which is tied with Lima One for being the least expensive option, and require a minimum 550 credit score.
LendingHome Rates
LendingHome issues hard money loans with interest rates that range from 7.5% to 12%. This means that LendingHome has some of the lowest rates on our list of top hard money lenders, similar to the rates offered by Visio Lending. However, LendingHome says that it’s common to receive an interest rate between 9% and 12%.
LendingHome rates and fees are:
- Rates: 7.5% – 12%
- Lender Fees (Points): 1.5% – 2.5%
- Closing Costs: 2% – 5%
LendingHome Terms
LendingHome’s hard money loans have a typical loan term of 12 months and require that the full amount be paid in full at the end of the term. However, LendingHome doesn’t have any penalties for early repayment. This makes LendingHome the shortest lender when it comes to the life of its hard money loans.
LendingHome’s terms include:
- Maximum loan amount: $1mm, 90% LTV, 75% ARV
- Average loan term: 12 months
- Prepayment penalty: None
- Time to approval/funding: Can be as little as 15 days
LendingHome Qualifications
Hard money lenders, including LendingHome, focus more on the property itself than the borrower. They look at the property condition, expected rehab costs, expected ARV, and the neighborhood. However, they do usually have a minimum FICO score they require and want to see past real estate experience or that you’re working with a licensed contractor.
Their qualifications include:
- Credit score: Credit score of 550+ (check yours free here)
- Bank statements: Two months
- Real estate experience: List of past projects or contractor’s information
- Down payment: 10% – 25%+
LendingHome Customer Service
To help its borrowers, LendingHome has a dedicated customer service team along with a representative assigned to your loan application. Through phone and email, this person will guide you through LendingHome’s loan application as well as help you prepare the necessary documents and receive the funds once you’re approved. LendingHome also has in-house appraisers who help with property valuation.
What LendingHome Is Missing
LendingHome doesn’t finance commercial properties. They only finance short-term residential real estate. If you’re looking for more permanent residential loan options, then Visio Lending is right for you. If you’re looking to finance commercial spaces, it’s best to look at Patch of Land or Finance of America Commercial, which both issue hard money loans for residential and commercial real estate.
How to Apply with LendingHome
Applying for a loan with LendingHome is easy. Visit their website and fill out their prequalification quiz, which just takes a few minutes. A loan rep will then call you to discuss your project in further detail.
Best Long-Term Hard Money Lender: Visio Lending
Visio Lending offers bridge loans for rent-ready properties to help you compete with all cash buyers. They also offer permanent investment property loans for long-term buy-and-hold investors. They offer a wide range of loans with a minimum loan amount of $45k and a maximum loan amount of $2mm. They’re best for you if you’re looking for a permanent investment property loan for a rental property.
Visio Lending Rates, Terms & Qualifications
Visio Lending offers permanent hard money loans with interest rates that are consistent with LendingHome. However, remember that Visio Lending’s core offerings are bridge loans for non-distressed properties as well as long-term investment loans, rather than short-term, fix-and-flip loans.
Visio Lending Rates
Visio Lending offers short-term bridge loans and permanent hard money loans with interest rates from 5.05% to 12.5%, which are similar to LendingHome’s rates. However, their rates do depend on your credit score and the type of loan you’re applying for. Their average rates are around 8%.
Visio Lending rates and fees are:
- Rates: 5.05% – 12.5%
- Lender Fees (Points): 0% – 5% (Standard – 2%)
- Closing Costs: $1,645
- Appraisal Fee: $300 – $500+
Visio Lending Terms
Visio Lending offers several different types of loans. including rental loans, blanket loans and refinance loans. For example, they have investment property loans for long-term investors with 30-year terms. They also offer bridge loans for rent-ready properties that have two-year terms. Like all of the other lenders on the list, Visio Lending doesn’t charge a prepayment penalty on their loans.
Visio Lending’s terms include:
- Maximum loan size: $2mm, 80% LTV
- Average loan term: 2-30 years
- Prepayment penalty: Yes
- Time to approval/funding: Close in an avg. of 21 business days and fund within 48 hours of closing
Their long-term purchase loan makes Visio Lending perfect for a longer-term investor. For example, Visio Lending can help you refinance a shorter-term hard money loan into one of their longer-term investment loans. This is great for both long-term investors as well as fix-and-flippers who need the flexibility to change their strategy, if necessary.
Visio Lending Qualifications
Visio Lending, like the other four lenders, has two general steps for applying for and getting funding on a hard money loan. These steps are the prequalification process and the funding process. The time to funding is generally within 21 business days. Since Visio Lending lends on LTV and not ARV, it does want to see your prior real estate experience, but it puts less focus on that and more focus on your FICO score and the property that you’re purchasing.
Their qualifications include:
- Credit score: 660+ (check yours free here)
- Bank statements: Two months
- Real estate experience: List of past projects
- Down payment: 20%+
Visio Lending Customer Service
Visio Lending is a national hard money lender with a dedicated customer support system like all of the other hard money lenders on our list. In terms of reputability, they have funded over 5,500 loans and they have bought, sold or financed over $275mm in residential real estate. They were founded in 2011 and they have an A+ rating with the Better Business Bureau.
What Visio Lending Is Missing
Visio Lending doesn’t offer any commercial loans or fix-and-flip loans. They do focus on both short-term bridge loans and long-term residential loans, but if you’re a commercial real estate investor, it’s best to apply for a hard money loan with Patch of Land or Finance of America Commercial. You might also want to check out LendingHome and compare offerings if you’re looking for a fix-and-flip hard money loan.
How to Apply with Visio Lending
You can apply for a hard money loan with Visio Lending by visiting their website and applying there by filling out a quick online form. Once submitted, a representative will contact you for more information.
Good Option for Both Residential and Commercial: Patch of Land
Patch of Land is a great alternative to LendingHome’s residential offerings, and they offer commercial loans as well. They could be a perfect fit if you want to buy one commercial property and one residential property, since you can use the same lender for both. Patch of Land also has the quickest funding time of all of the best hard money lenders, an added benefit for both residential and commercial investors. However, their fees are slightly higher than LendingHome and Visio Lending.
Patch of Land Rates, Terms & Qualifications
Patch of Land issues hard money loans with interest rates that range from 7.99% to 13%+. However, these rates depend on the qualifications of the borrower and the property. Like LendingHome, Patch of Land offers interest-only monthly payments and the repayment of its hard money loan in full at the end of its term. There is no penalty for prepayment.
Patch of Land Rates
Patch of Land offers residential and commercial hard money loans with rates starting at 7.99%. Their fees are slightly higher than LendingHome and Visio Lending. Patch of Land also charges its points based on the size of the loan, with a minimum floor of $3,000 for all loans. Lender fees are also taken directly out of the loan. The appraisal fee and any closing costs are considered out-of-pocket expenses and are covered by the borrower.
Patch of Land rates and fees are:
- Rates: 7.99% – 13%
- Lender Fees (Points): 3% – 5%
- Closing Costs: 2% – 5%
- Appraisal Fee: $300 – $500
Patch of Land Terms
Patch of Land offer hard money loans with loan terms from 1 to 3 years, and it doesn’t have a prepayment penalty. This gives residential investors as well as commercial investors the opportunity to spend up to three years purchasing and renovating a property before finding tenants and refinancing with a conventional mortgage.
Patch of Land’s terms include:
- Maximum borrowing amount: $5mm+, 80% LTV, 65% ARV
- Average loan term: 1 – 3 years
- Prepayment penalty: None
- Time to approval/funding: Can be as little as 10 days
Patch of Land Qualifications
Patch of Land also breaks down its loan approval process into two stages. However, unlike LendingHome, Patch of Land requires that all of a borrower’s documents be submitted during prequalification. The hard money lender then conducts an independent background check of the borrower, reviews all documents, and calls the borrower regarding final appraisal, loan terms, and funding.
Their qualifications include:
- Credit score: 550 (check yours free here)
- Bank statements: 2 – 3 months
- Real estate experience: List of past projects or scope of work and contractor bid
- Down payment: 20%+
Patch of Land Customer Service
Patch of Land is a national hard money lender that has funded more than 400 total real estate projects. Like LendingHome, it also has a dedicated team of customer service associates. These associates help you through the loan application process. Once you apply for prequalification, the lender assesses your qualifications and then an employee contacts you to guide you through the rest of the process.
What Patch of Land Is Missing
From our review, Patch of Land provides the fastest funding time of all of our lenders and offers both commercial and residential loans. However, they do require more documentation up front compared to the other lenders. They also have higher down payment requirements when compared to LendingHome as well as higher interest rates and fees.
How to Apply with Patch of Land
You can apply for a loan with Patch of Land on their site and filling out a quick online application. After you apply online, a loan rep will call you once your initial prequalification application is reviewed.
Good Hard Money Lender for Larger Projects: CoreVest
CoreVest offers both short-term fix-and-flip loans and long-term rental property loans, which is similar to what Lima One Capital offers. They’re a great alternative to Lending Home and like Visio Lending, they have multiple loan products, including bridge loans, fix-and-flip credit lines, and 30-year permanent mortgages. They also have maximum borrowing amounts up to $100 million, making them a great option for larger fix-and-flip projects.
CoreVest Rates, Terms & Qualifications
CoreVest offers hard money fix-and-flip loans with terms from 1 to 2 years, and they don’t charge any prepayment penalties. These fix-and-flip loans can come in the form of a credit line or a bridge loan. They also have a permanent rental mortgage with a term of 30 years, as well as portfolio loans with five- or 10-year terms. The maximum borrowing amount is as high as $100 million, or up to 75% – 80% LTV or LTC, which is the total cost of purchase and renovations.
CoreVest Rates
CoreVest offers competitive rates on their short-term and long-term loan products. Their starting rates are lower than those offered by LendingHome, but their lender fees tend to be a little bit higher. However, unlike LendingHome, their appraisal fees are not included and need to be paid out of pocket by the borrower.
CoreVest rates and fees are:
- Rates: 5% – 9.95%+
- Lender Fees (Points): 2%+
- Closing Costs: 2% – 5%
- Appraisal Fee: $300 – $500+
CoreVest Terms
CoreVest offers several loans, including credit lines, bridge loans, portfolio loans and single-asset permanent loans, and they all have different terms. The terms offered for their credit lines and bridge loans are one to two years. The portfolio loans have five- or 10-year terms, and the rental loans have 30-year terms.
CoreVest terms include:
- Maximum borrowing amount: $100mm, 75% – 80% LTV or LTC (loan-to-cost)
- Average loan term: 1 – 30 years
- Prepayment penalty: None
- Time to approval/funding: Can be as little as 15 days
Corevest Qualifications
CoreVest, like the other five lenders, has a two-step approval process for borrowers. They want to see your previous real estate experience and prefer borrowers with fix-and-flip experience for their short-term loans. They do have a minimum FICO score, which is higher than LendingHome’s, but they also look at the deal overall.
Their qualifications include:
- Credit score: 620+ (check yours free here)
- Bank statements: Two months
- Real estate experience: List of two+ past projects or scope of work with contractor bid
- Down payment: 20%+
CoreVest Customer Service
CoreVest is a national hard money lender that has closed over $3 billion in loans in 40 states. They were founded in 2014 and since then have closed over 20,000 loans. Their goal is to bring affordable, useful products and services to real estate investors. They have a team of dedicated relationship managers who can help you with most of your needs.
What CoreVest Is Missing
CoreVest doesn’t offer commercial loans, and instead just focuses on long-term and short-term residential loans for investors. If you want to buy an office building or another type of commercial property, it’s best to go with Patch of Land or Finance of America Commercial.
How to Apply with CoreVest
It’s easy to apply for a loan with CoreVest on their site. At the orange button that says “Apply Now” at the top of the page, select the type of loan you’re interested in, fill out the online form and submit it.
Another Good Residential Fix-and-Flip Option: Lima One Capital
Lima One Capital finances both short-term and permanent residential real estate projects. They offer short-term fix-and-flip loans for single-family homes, multi-unit properties, and condos. They also offer a 30-year mortgage for rental properties, which is similar to what Visio Lending and Finance of America Commercial offer. Lima One Capital is a great alternative to Visio Lending.
Lima One Capital Rates, Terms & Qualifications
Lima One Capital offers hard money fix-and-flip loans with terms from one to three years, and they don’t charge any prepayment penalties. These fix-and-flip loans can come in the form of a rehab loan, cash-out refinance, construction loan, and more. The hard money lender also has permanent rental mortgages with terms of 30 years. Interest rates can be fixed or variable.
Lima One Capital Rates
Lima One Capital offers residential fix-and-flip and permanent loans with comparative fees to LendingHome (1.5% – 3%) and a little bit higher than Visio Lending. Lima One Capital charges its points based on the size of the loan. The hard money lender has a minimum floor of $50k for its loans. Closing costs and loan origination fees are considered out-of-pocket expenses and covered by the borrower.
Lima One Capital rates and fees are:
- Rates: 7.99% -12%
- Lender Fees (Points): 1.5% – 3.5%
- Closing Costs: 2% – 5%
- Appraisal Fee: $300 – $500+
Lima One Capital Terms
Overall, Lima One Capital offers the most loan options out of the lenders on our list. Besides hard money loans, they offer rental loans, portfolio loans, multifamily loans and refinancing. Since they offer so many different loans, their loans have varying terms from one year all the way up to 30 years.
Lima One Capital’s terms include:
- Maximum borrowing amount: No maximum dollar specified, 90% LTV, 70% ARV
- Average loan term: 1 – 30 years
- Prepayment penalty: None
- Time to approval/funding: Can be as little as 15 days
Lima One Capital Qualifications
Like the other five lenders on our list, Lima One Capital breaks its hard money and permanent loan approval process into two steps. The first step is prequalification, where the same or similar preliminary documents are required. This helps the lender give a borrower a loan estimate based on qualifications. During the funding stage, more information is gathered and the actual loan is issued.
Their qualifications include:
- Credit score: 650+ (check yours free here)
- Bank statements: Two months
- Real estate experience: List of past projects or scope of work with contractor bid
- Down payment: 10%+
Lima One Capital Customer Service
Lima One Capital is a national hard money lender that’s raised more than $1 billion in capital from institutional investors. The lender also has more than 60 employees who offer dedicated customer service and support for all of their loans. Like the other lenders on our list, Lima One Capital is a full-service lender that helps borrowers throughout the lending process.
What Lima One Capital Is Missing
Like Lending Home and Visio Lending, Lima One Capital doesn’t fund hard money loans for commercial real estate investors. They’re not right for investors who want to purchase hotels, office buildings or other commercial properties.
How to Apply with Lima One Capital
You can easily apply for a hard money loan on Lima One Capital’s website, where it says “Apply Now,” or you can chat with a customer service rep online if you have questions.
Great Commercial Hard Money Lender: Finance of America Commercial
There aren’t that many nationwide commercial hard money lenders, but Finance of America Commercial is one. Finance of America Commercial offers commercial hard money loans similar to Patch of Land, but they also offer longer-term commercial loans that can be used for purchasing land and new construction. They’re best for both short-term and long-term commercial real estate investors due to the number of their commercial loan offerings.
Finance of America Commercial Rates, Terms & Qualifications
Finance of America Commercial offers both short-term and permanent loans ranging from one to 30 years. They lend up to 85% LTV with a maximum loan amount of $10 million. However, their minimum and maximum loan amounts depend on the type of the loan and the type of project, as well as the borrower’s qualifications.
Finance of America Commercial Rates
Finance of America Commercial offers low starting rates at 6.99%, but their average rates are more towards 8%. They do offer more conventional mortgages with lower rates, but these aren’t hard money loans and aren’t being considered. Finance of America Commercial’s rates depend on the type of project you’re financing, your commercial real estate experience, and in some cases, your FICO score.
Finance of America Commercial rates and fees are:
- Rates: 6.99% – 9%+
- Lender Fees (Points): 1% – 5%
- Closing Costs: 2% – 5%
Finance of America Commercial Terms
Like Visio Lending, Finance of America Commercial offers different loans, including bridge loans, non-recourse commercial loans, and construction loans for commercial properties, so these loans have varying terms from one to 25 years. Just like all of the other lenders on the list, Finance of America Commercial doesn’t generally charge a prepayment penalty.
Finance of America Commercial terms include:
- Maximum funding amount: $10mm+, 85% LTV, 75% ARV
- Average loan term: 1 – 30 years
- Prepayment penalty: None
- Time to approval/funding: Up to 30 days
Finance of America Commercial Qualifications
Finance of America Commercial also has two steps to its loan process. The first is the prequalification and the second is the funding process. This is the same as the five other hard money lenders. However, since Finance of America Commercial is a commercial hard money lender, their loans are often larger and generally require more due diligence, which increases their time to funding. It usually takes 30 days to close on a commercial loan with them.
Their qualifications include:
- Credit score: No minimum, but FICO score, experience, and property are all examined
- Bank statements: Two months
- Real estate experience: No experience required for a single loan; two+ completed projects for a line of credit
- Down payment: 15%+
Finance of America Commercial Customer Service
Finance of America Commercial has a customer support team that is dedicated and knowledgeable. They are a national commercial hard money lender that was established in 2017. Since then, they’ve closed over 2,000 loans.
What Finance of America Commercial Is Missing
The company isn’t as well known as others on the list, like LendingHome or Lima One Capital, and they don’t fund loans as fast as any of the other hard money lenders that we mentioned. Their focus is on commercial loans, but they do have a separate residential division as well. If you’re looking for a quick fix-and-flip loan, then we recommend our best hard money lender, LendingHome.
How to Apply with Finance of America Commercial
You can apply for a loan with Finance of America Commercial by filling out their online form and then waiting for a customer service agent to call you back.
Visit Finance of America Commercial
Bottom Line
We compared the six top hard money lenders of 2018 based on their rates, terms, qualifications, customer service, and funding time. After comparing and contrasting, we recommend LendingHome as our best hard money lender. They’re best for small business owners and fix-and-flippers due to their low rates and low financing costs.
If you want more information on hard money loans and the lenders that offer them, check out our hard money lender directory. Our best hard money lender for 2018 is LendingHome due to its comparative lower interest rates and fees and comparatively higher ARV and LTV ratios. Online prequalification takes just minutes.
best moneylender
Hi I was searching for the blogs for many times, now I have reached at the right place.
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Neal
I’m interested in buying a multi family property. I’ve been a landlord since 2005 owning 4 rental properties. I wanted to know how much down payment is required, and what is the credit score requirements?
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Noah Grayson
We can finance multifamily property nationwide up to $5M. We’ll lend up to 80% loan-to-value (LTV) and we will consider credit down to 600. You can apply on our website at http://www.southendcapital.com via our small-balance real estate application.
Best,
Noah
Managing Director
South End Capital
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Hi Neal,
You’ll find everything you need at our article on Multifamily Financing.
Let me know if you have any other questions.
Best,
Ian
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Jeff
How much is each of these companies charging for points?
2-4 weeks is a long time for hard money funding. A good direct hard money lender can fund in a week if needed.
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Noah Grayson
Hi Jeff,
Our average close time for collateralized hard-money real estate loans is 2 and 1/2 weeks. It takes a bit longer than a week for us because we do require a full appraisal. However, that enables us to provide longer term fixed financing and more competitive rates.
We can provide uncollateralized hard-money business loans in as fast as 1 day with an average close time of 3 to 5 days.
Our average points charged on our collateralized hard-money real estate loans ranges from 1 to 2.99 and for uncollateralized hard-money business loans that range is from 0 to 5.
Feel free to visit our website or contact us for more information.
Thank you,
Noah Grayson
Managing Director
South End Capital Corporation
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Hi Jeff,
We’ll get the table updated to reflect the points charged (where applicable) during our next article update. Thanks for pointing this out.
Would you like to share comparable information (as is in the table) for North Coast Financial, Inc?
We’re always on the look out for the best providers.
Best,
Ian
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Jeff
Hi Ian,
I’d be happy to provide this information. Please email me jeff@northcoastfinancialinc.com
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Michael Hopkins
South End Capital would not accept my formal mortgage application. South End Capital is an awful company. You will need to fill out several forms and applications both online and offline before they will even give you potential rates and fees. Where other lenders just require some information without a formal application before they quote. Anyone else is better.
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Noah Grayson
Hi Michael,
Thank you for posting your concerns about South End Capital. I have checked our system and I show no record of any application submitted by you.
I apologize if you had a negative experience with South End Capital as it is our primary goal to provide the highest level of customer service.
I would be happy to review your application as well as the details specific to your situation, so that I can have the opportunity to rectify any issues you encountered and provide you the level of service you expected.
Please feel free to contact me directly.
Thank you,
Noah Grayson
Managing Director
South End Capital Corporation
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Hi Michael,
Thanks for adding your voice to our site.
Sorry to hear your experience with South End Capital’s application process left something to be desired.
What hard money lender ended up being the best fit for you?
We’ll take your experience under consideration when we update this article.
Best,
Ian
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