Here are some examples of what a private hard money lenders conditions look like, reprinted with license from the Private Money Lenders Source of www.OPMCredit.com. Investors focus on how to identify the correct private hard money lenders loan to the right property deal and learning how to respect lenders program conditions is helpful.
A typical lender program for a rehab hard money lender: Hard Money Loans up to 200 Million Dollars. Rehab Loans available in all 50 States. Minimum Fico Score 620, with up to 75% LTV of the ARV. Two week funding. additional program for So. California. Construction Loans – 1 Million Minimum Loan Amount, Nationwide. Commercial Loans – 500K Minimum. Special Commercial Program Available in So. Calif. Only. Residential Loans Available in California only @ 65% LTV. Lots and Land Loans at 50% LTV Nationwide. Notice that the requirements specify rates, terms and geographical lending areas and are very detailed.
It is not unusual for a private lender to concentrate on only one or two types of properties. Some hard money lenders focus on very specific requirements as shown in this example. We can fund within 48 hours (or less). We offer loans for up to 6 months with no payment for up to 4 months. We loan on Single Family Homes up to 4Plexes. We can fund up to 100% of the purchase cost. We can also fund repair money. We specialize in providing financing for Real Estate Investors. You must have the property under contract before you apply. We will not lend on the following types of properties; Rural, Agricultural or small
farming communities, Recreational properties or cabins, Properties with less than 900 Square Feet, Properties with less than 2 beds,
Commercial properties or homes on or next to commercial corridors, properties around or across from Rail Road tracks or major highway
systems or freeways, Lots, Raw Land, Construction. It is evident that this lender does not want the additional liabilities and risk that these types of properties may present.
Lenders sometimes focus on rates and specific funding guidelines as shown in this example. Rates from 11 to 14% Interest Only payments. Points from 1 to 4. Terms from 6 to 36 months, no pre payment penalisation. Construction and Rehab loans up to 100% LTC at 65 LTV of the ARV. Land loans up to 50 LTV. Residential refi up to 65 LTV, purchase up to 80 LTV. Commercial refi up to 75 LTV, purchase up to 80 LTV. We are not FICO driven up to 65 LTV. Loan amounts from 250,000 to 100,000,000. We offer blanket loans as well. Therefore, many lenders have loan minimums and maximums and the investor property must be within these parameters.
Frequently a remodel or rehab loan will require specific guidelines as shown here. The Rehabber program provides 65% of After Repair Value
whichincludes sale price, repair costs, and, if structured properly, allloan fees. No down payment is requisite. This equates to little or no money out of pocket expense. Your money continues to work for you. Loans range from $30,000 to $1,000,000, 100% of the sale price and repair funds, not exceeding 65% of ARV (after repair value) , minimum term of Six (6) months, interest only payments, approval in 3 business days once all required docs are received and closing in 15 days once all required documentation is received. If purchase and repair costs are below 65% of the ARV, the closing costs can be wrapped in into the loan. The escrow repair funds are paid to the rehabber on a reimbursement basis. The rehabber pays for materials and labor then presents receipts and/or lien waivers as required. Appointments for inspection must be made at least three days in advance. Copies of the receipts and/or lien waivers must be provided at the time of the reimbursement. For commercial property, Monthly Payment Plan -Required credit score: >620 Commercial properties include: apartment building, office, industrial, mini-storage, retail and hotels. This type of loan is generally an example of a commercial lending program.
Another example of a rehab hard money lender. Up to 60% to 80% LTV, 12.5 to 18% rate , one year for Fix and Flip, and up to 3-5 Year terms for other property, 6-12 month interest guarantee . No pre-pay penalty. Note that the loan to value requirments have a substantially greater flexibiity.
Some lenders, focus on specific loaning areas as demonstrated in this example. Borrowers may pick out from two rate programs: 6 Points and 15% Interest (No Monthly Payments!) (Not available in the state of Florida). 8 Points and 10% Interest (No Monthly Payments!). Investor Rehab Loans will be 100% of purchase price and 100% of the repair funds so long as the LTV does not exceed 70% of the ARV (after repair value). No minimum or maximum loan amounts. For loan
amounts less than $62,500 minimum fees will apply. Our Program offers the following: 100% Funding (Purchase, Closing Costs, Construction, Interest, Points). Loan approval in 24-48 hours. No Monthly Payments Loans up to 70% LTV of the After Repair Value. 6
Month Loans Quick Closings. No Pre-payment Penalties. Full servicing Consulting. Weekly Construction Draws. No Junk Fees No Limit to
Number of Rehabs. Fast, Friendly Service!. No Limit to the Number of Rehabs. This type of lender has developed an excellent loan program for real estate investors.
It is clear that the lenders criterial as applied the deal to the lender will greatly improve the results and help investors get more deals funded. Real estate investors are learning that lending conditions are simply a guide to enable an investor to get more deals approved.