Hard money loans are provided by private lenders (not banks) and are secured by the property value rather than the borrower's credit or income. They close quickly — sometimes in days — making them popular for competitive deals.
Typical hard money terms:
- Rates: 9–14% interest
- Points: 2–4 origination points
- LTV/LTC: 65–75% of ARV or purchase price
- Term: 6–18 months with interest-only payments
Used primarily for fix-and-flip and BRRRR acquisitions where speed matters and conventional financing is unavailable.
Related Terms
ARV
After-Repair Value — estimated market value of a property after renovations are complete.
Bridge Loan
Short-term financing that bridges the gap between acquiring a property and arranging permanent financing.
Loan-to-Cost (LTC)
Loan amount as a percentage of total project cost (acquisition + rehab), used in construction and fix-and-flip financing.
Discount Points
Upfront fees paid to the lender to buy down the interest rate — 1 point = 1% of the loan amount.