Guide
What a hard money lender actually requires
The real checklist, in the order the lender weighs it - which is not the order a bank would.
Hard money underwriting inverts the conventional priority list. The property comes first, your cash comes second, the exit comes third, your experience fourth, and your credit last. Understanding that order tells you where to spend your preparation time.
1. The property
- As-is value, supported by an appraisal or broker price opinion the lender orders.
- After-repair value, supported by comparable sold properties in the last six months. This is the number under the most scrutiny, because the lender's 70% cap runs off it.
- Property type. Single-family and small multifamily are easy. Rural, mixed-use, manufactured, unusual, or anything with an environmental question is harder and pricier.
- Condition and marketability. A property that cannot be sold quickly in a downturn is worth less as collateral regardless of what it appraises at.
2. Your cash
The lender wants to see that you have skin in the deal and reserves behind it. Expect to document two to three months of bank statements. Gifted or borrowed down payments are sometimes allowed and sometimes disqualifying - ask early.
3. The rehab scope
A line-item budget beats a round number every time. "$60,000 rehab" is a guess; a scope with quantities, unit costs and a schedule is an underwriting document. It also determines your draw schedule, so a vague budget produces a painful draw process later.
4. The exit
Sell, refinance, or pay off. Whichever it is, the lender wants it stated with a timeline. For a refinance exit, expect questions about the rent, the DSCR and the seasoning requirement - see the refinance-out check.
5. Experience
Number of comparable projects completed in the last three years. This drives your leverage and pricing far more than credit does. See experience tiers.
6. Credit and background
Usually a soft screen with a floor around 600-660, plus a background check. Recent foreclosure, bankruptcy or mortgage lates matter much more than the score itself.
The document list
- Executed purchase contract, or deed and payoff if you already own it
- Line-item rehab budget and schedule
- Two to three months of bank statements showing cash to close and reserves
- Entity documents - articles, operating agreement, EIN, certificate of good standing
- Photo ID for every guarantor
- Schedule of real estate owned, and evidence of completed projects
- Hazard or builder's risk insurance naming the lender as mortgagee
- Title commitment, ordered by the lender or your title company
- A business-purpose affidavit confirming the loan is not for personal or household use
Questions people actually ask
What are the qualifications for a hard money loan?
In the order the lender actually cares about: the deal (purchase price against as-is value and after-repair value), your cash into the transaction, your exit, your track record, and last and least, your credit.
Practically, most lenders want to see 80%-90% of purchase price from them and the rest from you, a rehab budget that has been scoped rather than guessed, a credit score somewhere north of 620-660 as a screen rather than a pricing input, an entity to take title, and reserves beyond your down payment. First-timers get less leverage and worse pricing, not a refusal.
How do I qualify for a hard money loan?
Bring a deal that works on the lender's numbers, not yours. That means a defensible ARV, a rehab scope with line items rather than a round number, cash to close that you can document, and a specific exit with a date. Everything else - credit, income, experience - moves your pricing but rarely decides the answer on its own.
Are hard money loans hard to get?
Comparatively, no - which is the point of the product. Approval turns on the collateral, so a borrower who would be declined instantly by a bank can be approved in days. What is hard is getting good terms: the gap between what an experienced investor with ten flips is quoted and what a first-timer is quoted is large, and it shows up in leverage and points rather than in a yes or no.
How difficult is it to get a hard money loan?
Days rather than weeks, and the paperwork is a fraction of a conventional file. The friction is in the valuation and the draw process, not the approval.
How hard is it to get a hard money loan?
See above. The realistic constraint for most first-time borrowers is not approval, it is cash to close - see how much cash you actually need.
What are the requirements for getting a hard money loan?
A property under contract or owned, an as-is value and an ARV the lender can support, a scoped rehab budget, documented cash to close, an entity in most cases, hazard insurance naming the lender, title, and a stated exit. Income documentation is usually light or absent; that is the trade you are making.