Hard Money Lender

Hard Money Lender

Hard money lenders are lending companies offering a specialized type of real-estate backed loan. Hard money lenders provide short-term loans (also called bridge loans) that provide funding based on the value of real estate that is being secured by the loan. Hard money lenders typically have much higher interest rates than banks because they fund deals that do not conform to bank standards.

Hard money lenders will offer a range of requirements on how much they will lend (loan to value), what types of real estate they will lend on (commercial, residential, multi-family, land) and minimum and maximum loan sizes. Hard money lenders that lend on residential property must be licensed through their state regulatory agency and through the National Mortgage Licensing System (NMLS). Borrowers should verify the lenders license through the NMLS in order to prevent problems at closing, as many states require the lender's license number to be listed on the loan documents. Not having the license number on the loan documents could prevent the loan from closing.