What are the Qualifications for a Hard Money Loan?

Hard money loans are a great solution for real estate investors and others looking to finance non-owner occupied real estate. This can include apartments, single-family and multi-family homes, commercial buildings, industrial buildings, and land.

Securing a loan with a bank through traditional financing is difficult for many investors trying to receive a loan for a fix-and-flip project since most lenders require a specific credit score and income amount. They also typically want to set the loan terms to several years, rather than a short period of time.

With hard money loans, the loans lend on the asset, which is the property or land. The process of applying for a hard money loan is quick and straightforward, with minimal requirements and 1 to 2-year loan term options.

Qualifications for Hard Money Loans

With hard money loans, there are no credit score or income requirements. This makes it possible for more real estate investors to obtain funding for their rehab projects. The qualifications for a hard money loan include:

Down Payment:

One of the main factors in obtaining the loan is meeting the down payment requirement. The down payment serves as collateral for your loan and can range from 10% to 40% depending on the specific type of property. These down payments are calculated based on the Loan-To-Value (LTV) ratio of the property. For example, let’s say you want to purchase a residential property for $100K. If the LTV ratio offered is 90%, then you would be responsible for the $10K down payment.

Appraisal:

This is ordered by West Forest Capital.

Insurance Policy:

West Forest Capital should be the loss payee and additional insured.

Builder’s Risk Insurance:

For extensive rehab projects.

Lender Title Insurance:

West Forest Capital as the beneficiary.

Credit Score:

While a FICO credit score of 600+ is preferred, it’s still possible for projects to be funded with a score below this amount.

Hard Money Loans with West Forest Capital

Our loan rates are as follows:

• 9.5% – 11% interest only
• Amortization option available
• 1 to 2 points origination

Our loan terms are as follows:

• First lien preferred (second can be considered)
• 1 year term
• 2 year term available
• Up to 85% of purchase price
• Up to 100% of rehab
• Total Loan amount not to exceed 70% ARV
• Appraisal must be ordered by West Forest Capital

Loan Rates and Terms with West Forest Capital

West Forest Capital provides funds to real estate investors and others looking to finance non-owner occupied real estate. We fund property types which include:

We provide rehab funds, or full construction costs, as needed. We also provide fast closings, almost always less than 10 days, and often as quick as 3 to 5 days. We’ve even previously closed a brand new loan in one day! We lend in New Jersey, New York, Connecticut, Massachusetts, Pennsylvania, and Florida.