Real Estate Investment
What Is Hard Money Lending?
Hard money loans are short-term, asset-based loans from private investors or companies — secured primarily by the real estate rather than the borrower's creditworthiness. They are widely used by investors for fix-and-flip projects, bridge financing, and distressed property purchases where traditional financing is too slow or unavailable.
Hard Money vs. Conventional Financing
Hard Money Loans
Asset-based qualification. Approval in 3–7 days. Interest rates: 8–15%+. Origination: 2–5 points. Term: 6–24 months. Loan based on ARV (after-repair value). Used for fix-and-flip, bridge, and distressed properties.
Conventional Loans
Credit-based qualification. Approval in 30–45 days. Interest rates: 6–8% (current). Origination: 0–1 points. Term: 15–30 years. Loan based on appraised value. Used for primary residences and long-term holds.
Real Estate Exam Key Points
Hard money loans are asset-based — the property value is the primary qualifier
Made by private lenders — not banks or government programs
Short-term, high-interest — meant for quick turnaround deals
Loan-to-value based on ARV (after repair value), not current as-is value
Used for fix-and-flip, bridge financing, and properties that can't qualify conventionally
Speed and flexibility are the main advantages over conventional financing
Definition Page Pillars
Use this term page as a concept layer, then return to pillar pages for full workflow review.