Hard Money Loans For Apartment and Commercial Properties

Hard money loans and private capital for hard money situations were, in the past, a rarity, but as markets evolve and capital ebbs and flows, situations may require hard money that may not have in the past. The benefit to true hard money loans on commercial real estate is that the only underwritten component is the as-is value of the property. This means fast closings and high costs.

In the past, borrowers have used hard money because of credit, legal, or financial issues. Hard money financing in commercial real estate is also used when a borrower needs a particularly fast closing because of a deadline, or because financing fell through on a property under contract. In general, hard money is still used every day and for a variety of reasons. That said, hard money may not be your only option, and before applying for a hard money loan, you should know if you have any alternatives available. We have a popular alternative to hard money financing for commercial property that we like to call soft money. 

We have no minimum credit score requirements, but we suggest you bring the process of improving your credit so you can refinance into a conventional loan.

Sample Hard Money Loan Terms for Multifamily and Commercial Property Loans in 2023

Size:                    $1 million and up

Term:                   6 months to 3 years (extension options available)

Interest Rates:    12% +

Origination Fee:  3.00% - 5.00%

Amortization:       Interest only (deferred payments occasionally available)

Maximum LTV:     65% of as-is value

Advantages

• Loan amount determined by property value.

• Fast closing process.

• Limited borrower qualifications required.

Disadvantages

• Highest rates.

• Highest closing costs.

• Short period with balloon payment.

• Risk of losing property for a fairly small loan amount.

• Full recourse.