Frequently Asked Questions

  • A hard money loan is a short-term, asset-based loan typically used by real estate investors. It's secured by the property and funded by private investors or companies, traditional and non-traditional banks.

  • Real estate investors, house flippers, landlords, and developers use hard money loans to purchase or refinance investment properties quickly—especially when time, credit, or bank financing are challenges.

  • Unlike traditional loans that focus on credit scores and income, hard money loans focus on the value of the property. They're faster to fund but usually have higher interest rates and shorter terms.

  • Hard money can be used for:

    • Fix & flips

    • Rental properties (buy & hold)

    • Ground-up new construction

    • Commercial buildings

    • Multi-family units

    • Land (in some cases)

  • Funding can be completed in as little as 3–10 business days, depending on the lender and documentation provided. That’s why hard money is ideal for time-sensitive deals.

  • Terms vary, but most hard money loans have:

    • 6 to 24 month durations

    • Interest rates between 9%–13% (varies)

    • 1–3 points (loan fees)

    • No prepayment penalties with some lenders

  • Hard money lenders may review credit, but it’s not the primary decision factor. A deal can still be funded with poor credit if the property has strong value and equity.


  • Not always. Most hard money loans are asset-based, meaning income docs like W-2s or tax returns are often optional or limited.

  • Most hard money lenders offer:

    • Up to 70%–75% of the After Repair Value (ARV)

    • Or up to 85%–90% of the purchase price (Loan-to-Cost)
      Each deal is evaluated based on its risk, exit strategy, and experience of the investor.

  • No problem. You can still use a hard money loan to:

    • Refinance and pull cash out

    • Pay off an existing loan

    • Fund renovations

    • Avoid foreclosure or auction

  • Not at all—but like any industry, there are shady players. Reputable hard money lenders are transparent about fees, and provide written loan terms. Always do your due diligence or work with a trusted broker like Butler Bridge Capital to avoid predatory lending.

  • Typically, no. Hard money loans are meant for non-owner-occupied properties—mainly investment or commercial properties. There are rare exceptions, but consumer protection laws make it more complex.

  • Many lenders offer rehab loans or fix & flip loans that include a construction draw schedule. You'll get funds in stages as work is completed and inspected.

  • If you default, the lender can foreclose on the property. That’s why it’s important to have a strong exit strategy—whether it’s selling the property, refinancing, or renting it out.

  • Yes—especially if you have multiple projects or properties with good equity. Just make sure your cash flow, track record, and project timelines support it.