How to Get a Hard Money Loan

Hard money loans are short-term, asset-based financing options primarily used by real estate investors, house flippers, and developers to fund projects like fix-and-flip properties, rental acquisitions, or construction. Unlike traditional mortgages, which focus on a borrower’s credit and income, hard money loans prioritize the value of the property used as collateral, making them accessible to those with less-than-perfect credit or unconventional financial situations. However, their high interest rates (8–15%) and short repayment terms (6 months to 3 years) require careful planning. This guide outlines the steps to secure a hard money loan, lists the top 15 hard money lenders in 2025, and provides practical tips for success.

Hard Money Loan Opportunities

Hard money loans, often called bridge loans, are funded by private individuals or companies, not traditional banks. They are secured by real estate, with hard money lenders focusing on the property’s after-repair value (ARV) or current value, offering loan-to-value (LTV) ratios of 65–80%.

These private money loans are ideal for quick transactions, closing in as little as 5–14 days, but come with higher costs, including interest rates of 8–15% and origination fees of 1–3%. Hard money loans allow bad credit and are commonly used for fix-and-flip projects, rental property purchases, or bridging financial gaps until permanent financing is secured.

Steps to Get a Hard Money Loan

1. Assess Your Financing Needs

Determine the purpose of the loan (e.g., fix-and-flip, rental purchase, or construction) and the amount required. Calculate the total project cost, including purchase price, rehab expenses, and holding costs (e.g., taxes, insurance). Ensure the property’s ARV supports a profitable exit strategy, such as selling or refinancing, to repay the loan within the short term (6–18 months). Lenders will evaluate the deal’s potential, so a solid business plan is critical.

2. Research Hard Money Lenders

Find reputable lenders specializing in your project type. Online platforms like PrivateLenderLink.com or BiggerPockets.com list lenders by state and specialty. Local real estate investment groups, title companies, or realtors can provide referrals. Verify lenders’ licensing through the Nationwide Multistate Licensing System & Registry or state real estate departments. Compare interest rates, LTV ratios (typically 65–80%), fees, and funding speed. Some lenders require experience, while others work with beginners.

3. Prepare Documentation

Gather essential documents to present a strong hard money loan application:

• Property Details: Address, purchase price, ARV appraisal, and rehab scope of work.

• Business Plan: Outline the project timeline, budget, and exit strategy (e.g., sale or refinance).

• Financial Documents: Bank statements, tax returns, and proof of down payment (20–30% of purchase price).

• Borrower Information: Identification, credit history (if required, minimum 600–650), and LLC registration (many lenders require a business entity).

• Experience: For beginners, a mentor or licensed contractor may strengthen the application.

An organized executive summary highlighting the deal’s profitability can set you apart.

4. Submit a Hard Money Loan Application

Complete the lender’s application, often a Uniform Residential Loan Application or a custom form. Provide detailed property information and your rehab plan. Some lenders, like Kiavi, offer online applications for faster processing. Expect a Good Faith Estimate (GFE) and Truth-in-Lending Statement (TIL) within three days, outlining costs and terms. Be transparent about your financial situation and project goals to build trust with the lender.

5. Underwriting and Appraisal

The lender evaluates the loan’s risk by assessing the property’s value, your repayment ability, and the project’s feasibility. Most require an appraisal to confirm the ARV, though some, like Easy Street Capital, may use in-house valuations. Underwriters focus on the LTV ratio (65–80%) and your exit strategy. If approved, the lender issues a term sheet detailing the loan amount, rate, and repayment schedule.

6. Close the Hard Money Loan

Once approved, sign the loan agreement, including a promissory note and deed of trust, securing the property as collateral. Loans can close in 5–14 days, with funds typically distributed via ACH to your account. Be prepared to pay origination fees (1–3%) and provide a down payment (20–30%). Some lenders, like New Silver, offer instant proof-of-funds letters to strengthen your offer in competitive markets.

7. Execute Your Project and Repay

Use the funds to purchase and rehab the property, adhering to the timeline and budget. Make interest-only payments (if required) during the loan term, typically 6–18 months. Execute your exit strategy—sell the property or refinance into a conventional loan—to repay the principal and interest. Early repayment is often penalty-free, maximizing cash flow for investors.

Risks and Considerations

Hard money loans carry higher risks due to elevated interest rates (8–15%) and short terms, increasing the cost of borrowing. Defaulting risks foreclosure, as the property is collateral. If the project exceeds budget or timeline, or if the property doesn’t sell as planned, you may face financial strain. Ensure the ARV supports a profit margin after accounting for loan costs, rehab expenses, and market fluctuations. Compare multiple hard money lenders to secure favorable terms and avoid predatory practices.

Tips for Success

• Build Relationships: Establish trust with lenders for better terms on future loans.

• Have an Exit Strategy: Plan to sell or refinance within the loan term to avoid balloon payments.

• Work with Professionals: Hire licensed contractors and consult real estate experts to ensure project success.

• Shop Around: Compare rates, fees, and LTV ratios from at least three lenders.

• Mitigate Risks: Maintain a contingency fund (10–20% of project costs) for unexpected expenses.

Top 15 Hard Money Lenders in 2025

According to the Refiguide, the following hard money lenders are recognized for their competitive rates, fast funding, and flexibility, based on industry reputation and 2025 market insights:

1. Kiavi: Offers fix-and-flip loans up to $3 million, 7-day closings, and no appraisal for experienced investors.

2. New Silver: Provides loans in 5 days, with rates from 7.5% and a fully online process.

3. Lima One Capital: Offers fix-and-flip and rental loans, with in-house expertise and LTVs up to 80%.

4. Easy Street Capital: Closes in 48 hours with no appraisal, rates from 9.9–11.9%.

5. AMZA Capital: Funds loans from $75,000, ideal for experienced investors, with 80% LTC.

6. RCN Capital: Offers tiered rates for repeat investors, minimum 650 credit score.

7. Flip Funding: Provides diverse loan types for large projects, competitive rates.

8. Groundfloor: Beginner-friendly with low rates and extended terms up to 24 months.

9. Residential Capital Partners: No down payment for select deals, flexible credit.

10. BridgeWell Capital: Closes in 15–30 days, beginner-friendly with mentorship support.

11. CoreVest: Specializes in rental and multifamily loans, funding up to $50 million.

12. Park Place Finance: Works with inexperienced investors, competitive terms.

13. Express Capital: Offers 36-month terms for fix-and-flip, rates 10–13%.

14. Marquee Funding Group: Closes in 7 days, focuses on complex deals.

15. Constitution Lending: Beginner-friendly with fair terms, requires business plan.

Getting approved for a hard money loan requires a clear understanding of your project’s financials, a compelling business plan, and a reputable lender. By assessing your needs, preparing documentation, and comparing lenders, you can access fast funding for real estate investments. The top 15 lenders listed offer diverse options for beginners and experienced investors, but always verify terms and ensure your exit strategy aligns with the loan’s short term. With careful planning, hard money loans can unlock profitable opportunities in 2025’s competitive market.

Sources:

• Moudry, S. (2025, February 25). Best hard money lenders for 2025. HousingWire. 

• Rothstein, R. (2025, February 12). Best hard money lenders of 2025. Forbes Advisor. https://www.forbes.com/advisor/mortgages/best-hard-money-lenders/

• Hard Money Second Mortgages. (2025, April3). Fit Small Business https://www.refiguide.org/hard-money-second-mortgage-pros-and-cons/

• Hard money loans: Insights and lender directory. (n.d.). Private Lender Link. https://privatelenderlink.com/

• Complete list of hard money lenders in 2025. (2025, January 22). New Silver. https://newsilver.com/hard-money-lenders/