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Hard Money Loan Requirements

Do you meet the requirements for a hard money loan?

Hard money loan requirements are different from traditional bank loans.

Hard money loans are collateralized by the underlying asset, like a retail center, duplex, or apartment building. As such, hard money lenders are more concerned with the value of your property than the borrower’s income and credit history. Lenders take on less risk when a borrower has more equity in their property.

Typically, hard money lenders may require a borrower to have some real estate experience and/or a comprehensive plan for the property. Also, hard money lenders may prefer that a borrower have sufficient cash reserves to cover monthly payments.

In this article, we discuss what a hard money loan is, and three primary hard money loan requirements:

  • Loan-to-value ratios
  • Financial stability
  • Repaying the loan

What Is a Hard Money Loan?

Hard money loans are short-term loans that rely on real estate collateral more so than one’s credit history.  Borrowers look to hard money loans when they need immediate real estate financing.  Hard money loans tend to have higher interest rates than traditional loans, however, the list of items needed to close the loan are usually much less.

Loan-to-value ratios

The main hard money lender requirement is to have a sufficient down payment for the loan. This amount is the borrower’s equity in the property.

Hard money lenders typically want borrowers to have 30% equity for a residential property and 40% for commercial real estate. Occasionally, hard money lenders may permit borrowers to use other properties to cross-collateralize the loan in order to put less money into the transaction.

Borrowers who offer higher down payments are more likely to receive loan approval from hard money lenders.

Hard Money Loan Requirements
Hard Money Loan Requirements

Borrower’s Financial Stability

Hard money loan lenders look for financial stability of the borrower.  To increase your chances of obtaining a hard money loan, borrowers must have enough cash in reserve to cover monthly payments and other expenses. They also must show their ability to cover costs like taxes, insurance, and homeowners association fees.

As a result, you are more likely to receive a hard money loan if you can show the lender that your financial situation is stable.

You will have more success working with a hard money lender when you can offer a strong financial position which shows ample cash on hand. It shows the lender that you are a lower risk of default.

Repaying the Loan

Finally, receiving a hard money loan depends on your ability to repay the loan.

Borrowers with real estate investment experience and good credit are more likely to repay a loan. Thus, lenders are more likely to finance hard money loans with more favorable terms when a borrower has a history of successful projects and higher credit.

That does not necessarily mean first-time borrowers with lower credit do not have a chance to receive a hard money loan. Lenders will require more information about the property and the overall structure of the loan if you’re a less experienced real estate investor.

To assure the lender that their loan will be repaid, borrowers should prepare a contingency plan to liquidate the property or refinance with a traditional lender once the loan comes due.

Work With Us

No matter what your experience with hard money loans, Wilshire Quinn Capital typically funds hard money loans in 5 to 7 business days. We offer hard money loans in California and nationwide, up to $20,000,000.  Please contact a Wilshire Quinn loan representative at 619-872-6000 to go through your loan scenario today, or visit www.wilshirequinn.com for more information.

  • Funding typically in 5-7 business days
  • Loan Amounts from $200,000 to $20,000,000

  • Interest Rates from 8% to 10.5%
  • Loan Term: 3 – 24 months

  • Commercial & Residential (non-owner occupied) Real Estate

  • Purchase, Refinance, Cash-out Refinance, Rehab, Blanket Loans
  • Foreign National Loans Available


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About Wilshire Quinn

Wilshire Quinn is a San Diego hard money lender focused on short term bridge loans, secured by first trust deeds. The company is based in San Diego, CA with offices in Los Angeles and San Francisco. Wilshire Quinn typically funds loans for their customers in 5-7 days. Their successful track record is closely linked to their ability to make immediate lending decisions based on their highly disciplined underwriting approach. The company funds a variety of loans such as: refinance, purchase, blanket, rehab loans, 1031 exchange, partnership buyouts, and more. They originate hard money loans ranging from $200,000 – $20,000,000. Wilshire Quinn works with commercial and residential buyers nationwide.

Recently Funded Hard Money Loan Transactions

Hard Money Loan Requirements
El Monte, CA

Loan Amount: $4,750,000
Loan Type:  Refinance
Property Type:  Industrial
Loan-To-Value: 60%
Term: 12 Months

Hard Money Loan Requirements
San Diego, CA.

Loan Amount: $765,000
Loan Type:  Refinance
Property Type: Single Family
Loan-To-Value: 60%
Term: 12 Months

Hard Money Loan Requirements
Santa Monica, CA
Newport Beach, CA

Loan Amount: $3,725,000
Loan Type:  Purchase / Rehab / Blanket
Property Type: Single Family
Loan-To-Value: 45%
Term: 12 Months

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