A hard money loan is a short-term, asset-based loan secured by real estate and funded by private lenders rather than banks or institutional lenders. The term "hard money" refers to the "hard asset" — the real property — that serves as the loan's collateral. Approval is driven primarily by the property's value and the investor's exit strategy, not personal income, employment, or tax returns. Hard money loans typically carry higher interest rates than conventional mortgages (reflecting their speed and flexibility), are structured as interest-only, and have terms of 6 to 24 months.

In most cases, hard money loans close in 7 to 14 business days from application. Some straightforward transactions — where the property is clean, the borrower is prepared, and there are no title complications — can close in as few as 5 to 7 days. This is fundamentally faster than any bank or conventional lender, which typically requires 30 to 60 days. The key to fast closings is having your documents ready: property details, purchase contract, short investment summary, and a credit authorization. We'll guide you through exactly what's needed the moment you reach out.

Most hard money lenders in our network require a minimum FICO score of 580. Some programs allow lower scores depending on the property type, LTV, and borrower experience. Crucially, credit score is a secondary factor — the property value is the primary underwriting driver. Borrowers with recent bankruptcies, foreclosures, or short sales can often still qualify if the LTV is conservative and the investment plan is sound. Unlike conventional lending, a rough credit history does not automatically mean a denial.

Hard money loans are available for a wide range of non-owner occupied, investment property types, including: single-family residential (1–4 units), small and large multifamily (5–20+ units), condominiums and townhomes, mixed-use properties, commercial real estate (office, retail, warehouse), raw land and land with entitled development rights, and short-term rental properties. Owner-occupied primary residences have more restrictions due to federal lending regulations; hard money programs are structured for investment and commercial properties where these regulations do not apply.

Prepayment terms vary by lender and loan structure. Many hard money programs include a minimum interest period — typically 3 to 6 months — meaning you owe interest for that period even if you pay the loan off early. Beyond the minimum interest period, most hard money loans allow prepayment without penalty, which is ideal for fix-and-flip investors who sell before the term ends. When we structure your loan, we always negotiate prepayment terms that align with your projected exit timeline to avoid any surprises at payoff.

The two terms are often used interchangeably in real estate investing, and in practice there is significant overlap. "Hard money" describes the funding source and underwriting structure — private capital, asset-based, no income verification. "Bridge loan" describes the purpose — bridging a gap between where you are now and a long-term solution such as a sale or permanent refinance. The structural distinction: hard money programs tend to be shorter-term (6–12 months) and used for distressed acquisitions, while bridge loans may extend to 24 months and are often used for value-add or stabilization plays. At Hawk, we offer both as part of an integrated short-term lending program.

Hard money loan rates typically range from 9% to 13% per year, depending on the property type, LTV, borrower experience, loan amount, and market conditions. Rates are higher than conventional financing because they reflect the speed, flexibility, and no-documentation advantage that banks cannot offer. For investors who have been declined by a bank, cannot document income conventionally, or need to close in under two weeks, the rate premium consistently justifies itself in deal access and capital efficiency.

Most hard money lenders cap leverage at 65–75% of the property's current "as-is" appraised value. For fix-and-flip scenarios, leverage is typically expressed as a percentage of the After-Repair Value (ARV) rather than current value — usually 70-75% of ARV. Borrowers with stronger credit profiles and more real estate experience typically qualify at the higher end of the range. Borrowers with recent credit events or less experience will typically be offered 60–65% LTV while they build their track record. The key number to know before you engage: bring at least 25–35% of the property's value in equity or down payment.

Hard money requires significantly less documentation than conventional financing. A standard application needs: property address and purchase contract (or property details for a refinance), a brief investment summary or business plan (what you're doing with the property and your exit strategy), a current credit report authorization, proof of funds for the down payment or equity contribution, and a government-issued ID. For experienced investors with an established track record, the process is even more streamlined — prior transaction history often substitutes for additional documentation requirements.

Hard money loan terms of 6–24 months are set based on your projected exit timeline. If that timeline shifts — renovation runs long, the market softens, or a refinance is delayed — most hard money lenders offer extension options, typically in 3–6 month increments at an extension fee. Extensions are almost always preferable for the lender compared to a foreclosure process, so good-faith borrowers with a clear path to exit can typically negotiate more runway.

Yes — hard money is commonly used by buy-and-hold investors to acquire and rehab rental properties that don't yet qualify for DSCR or conventional permanent financing due to their condition, occupancy status, or the investor's timeline. The typical strategy: use hard money to acquire and stabilize the property quickly, then refinance into a 30-year DSCR rental loan once the property is tenanted and income-producing. The hard money loan serves as the short-term acquisition and renovation vehicle; the DSCR loan is the permanent hold structure.

Hard money is the right tool when one or more of the following are true: you need to close in under 14 days; your personal income or credit history doesn't meet bank standards; the property condition doesn't qualify for conventional financing; you've exceeded the 10-property conventional lending cap; you're a foreign national without U.S. credit history; or you're in the middle of a 1031 exchange with a tight identification deadline. If none of these apply and you have time for a conventional process, a DSCR or bank loan will deliver a better rate.