Hard Money Loan

Definition

A hard money loan is short-term financing from a private or semi-private lender, secured by the real estate itself. Terms are typically 6-12 months, interest-only, with rates of 10-14% and 2-4 origination points. Hard money is used for deals banks won’t finance — distressed properties needing major rehab. The loan amount is typically 70-75% of ARV, and the gap is the investor’s required cash-in-deal.