Hard money lending

As banks continue to make obtaining a loan difficult for even the best borrowers, private lending has become a viable option. Based primarily on equity, hard money allows borrowers with equity a chance to payoff debts or buy that great investment property!

This is in direct contrast to the institutional financing of today’s real estate market.  With so little fluidness, institutional lending has become hard for everyone to come by, regardless of what you were able to secure in the past.  If you own too many properties, you may not qualify, if you are self employed and tax returns do not reflect your true income, that can exclude you, even some asset classes can exclude you from obtaining bankable financing.

This is why hard money lending is able to fill such a gap.  Instead of focusing on hard and fast guidelines, hard money typically rely on the actual value of the property that will secure their loan.  Interest rates will be higher than institutional financing, but hard money is still less expensive than having a partner is going to be.
 
There is a viable alternative for unique, the stated income, the credit challenged, and those that might not fit into the institutional loan guidelines but have equity- private money!
 
So, whether your borrower has a 775 fico score or a sub 500 fico, the major criteria is the loan to value ratio. Private money lenders typically will review the borrower’s income and credit, but ordinarily these factors will have little or nothing to do with the decision to lend or not.

The final factor that will make the decision of whether or not a loan will be made, regardless of it being a hard money commercial loan or other type of private financing when dealing with hard money, is the value of the property you have to be secured.  If there is enough value in your real estate, chances are there is a loan that can be made that can meet your needs.