Hard money lenders set their own eligibility rules. The property, project, borrower, and planned repayment all affect an offer. Ask for written criteria before paying an application or appraisal fee.
Property and project
Start with the address, property type, purchase contract, current condition, and a defensible value estimate. For a renovation, prepare a line item scope of work, contractor information, schedule, and evidence supporting the expected value after repairs. Ask whether the lender calculates leverage against purchase price, current value, or after repair value; those measures produce different results.
Borrower and available funds
A lender may review credit, prior project experience, liquidity, ownership documents, and the source of funds for closing and reserves. Some lenders accept first time investors; others require a track record. There is no universal minimum score or down payment for this category. Request the lender's actual thresholds and ask how a weaker part of the application affects pricing or eligibility.
Exit plan and timing
Explain whether the loan will be repaid through a sale, refinance, or another documented source. Include realistic time for repairs, permits, leasing, and refinancing. Review maturity, extension options, default charges, and any prepayment terms in the proposed documents.
Documents to prepare
- Purchase contract or current ownership and property information.
- Project budget, contractor details, and schedule when work is planned.
- Proof of funds, borrower or entity records, and any requested credit authorization.
- Comparable sales, rental information, and a written repayment plan as applicable.
The exact list depends on the lender and loan. Compare a complete written quote that identifies the rate, points, other fees, draw conditions, required cash, and repayment date. Our directory can help you find potential lenders; confirm their current requirements and credentials directly before proceeding.
FAQs
Is there a minimum credit score?
There is no universal threshold. Ask each lender about its credit criteria and how credit affects the offer.
Do lenders verify income?
Requirements differ. A lender may ask for income, liquidity, entity, or project records even when the property is central to underwriting.
How much cash do I need?
It depends on the property, valuation method, loan terms, fees, reserves, and any renovation costs. Request a written cash to close estimate.
Can a first time investor apply?
Some lenders consider first time investors, while others require completed projects. Ask for eligibility criteria before applying.
Which documents should I prepare?
Prepare property and borrower information, proof of funds, a project budget if relevant, and a repayment plan. The lender may request more.