A hard money loan is mortgage financing for businesses that cannot get funding from other traditional lenders, either due to credit issues or properties in disrepair. These loans are considered a last resort in mortgage financing due to higher interest rates and fees. Traditional lenders usually have better rates for longer terms, while hard money lenders offer more rapid funding times.
The following list includes the five best hard money lenders, what they are best for, and whether they will fund first-time investors:
Lender | Best For | Funds First Time Investors? |
|---|---|---|
Best overall—low rates and fast funding | Yes | |
Short-term residential fix-and-flip loans | Yes | |
Refinancing or growing a rental portfolio | Yes | |
Investors with short-term experience | No—complete two flips or own two rentals within three years | |
Large portfolios and loans to $250 million | No—complete three fix-and-flips or manage rentals |
Kiavi: Best Overall Hard Money Lender
Kiavi is our best overall choice for hard money loans. With fast funding times, no hidden fees in its closing costs, and no personal income qualifier, Kiavi is an excellent choice for business owners looking for a hard money loan.
Kiavi can provide hard money loans of up to $3 million for 12 months with funding in just five to 15 days. Kiavi can fund first-time flippers―zero to five flips in 24 months―but experienced flippers―five or more flips in 24 months―will get better rates and a dedicated manager. Visit Kiavi website for more information.
Lima One Capital: Best for Short-term Residential Fix-and-Flip Loans
Lima One Capital has a wide variety of lending options, including several construction options, including a fix-and-flip, a fix-to-rent, and a traditional construction loan. Fix-and-flip and construction loans have a maximum loan amount of $3 million. The maximum loan amount for a value-add bridge loan is $20 million. Terms and percentages vary among the products.
Lima One Capital is an excellent choice for both new and experienced investors. Minimum credit score requirements range between 600 and 660. Check out its website for more information and to begin the application process.
Visio Lending: Best for Refinancing or Growing a Rental Portfolio
Visio Lending has many different lending products, including single-rental loans, blanket loans for multiple properties, and bridge loans. In addition, Visio Lending offers portfolio lending for vacation and short-term rental properties. No personal debt to income (DTI) is calculated, meaning that the borrower qualifies based on property cash flow.
Visio Lending is a solid choice for borrowers with solid credit profiles who want to purchase and renovate properties, with many different lending products to choose from. While you can’t fill out an application through its website, you can fill out a contact form to have a representative get in touch with you. Check out Visio Lending’s website for more information.
RCN Capital: Best for Investors With Short-term Experience
RCN Capital is a good choice for investors with some fix-and-flip or long-term rental experience. RCN requires at least two flips or two long-term rentals within the last three years. RCN Capital does lend up to 90% LTC and 100% of the renovation costs, with closing in as soon as 10 days.
RCN Capital offers you the option of applying through its website. In addition, it has live chat operators available to answer any questions you might have before applying. Visit RCN Capital’s website for more information or to begin the application process.
CoreVest: Best Hard Money Lender for Larger Projects
CoreVest is an excellent choice for business owners looking to fund larger projects. The blanket mortgage product has terms of five, seven, or 10 years, with up to a 75% LTV ratio. The fix-and-flip credit line allows builders to complete projects, sell them, and continue with a revolving line of credit they can use for their next flip. Credit lines go from $1 million to $50 million.
CoreVest offers both an online application and a chatbot on its website, which can help you get the process started. CoreVest also offers an 800 number if you would prefer to speak to someone on the phone. Contact CoreVest today to begin the application process.
If you’re considering a hard money loan, it is critical that you run an investment property cash flow projection to make sure the rental income or fix-and-flip profits cover all costs, including the costs of the hard money loan. Focus on positive cash flow and calculate all projected income and expenses.
How We Determined the Best Hard Money Lenders
When comparing the best hard money lenders, we considered loan rates, terms, and required borrower qualifications. We also considered whether the lenders would work with new investors or if they required prior experience to obtain financing. We also looked at funding speed and maximum loan amounts when compiling our list.
Bottom Line
Hard money loans can offer borrowers the opportunity to obtain funding faster than traditional loans. They also offer borrowers loans with qualifications or requirements that would make them unable to be sold on the secondary market. Because of this, they tend to have higher interest rates and fees than traditional loans and may be considered a last resort if traditional financing is unavailable.
Plan what type of financing you need and shop around for traditional loans before checking into hard money loans. If a hard money loan is necessary, be sure to understand all the costs involved before signing.
