Obtaining a Hard Money Loan for Non-Owner-Occupied Real Estate

08 May 2018

Non-owner-occupied properties are highly sought after for their income potential. But depending on the condition of the property or its perceived riskiness, many conventional lenders may be reluctant to extend funds to acquire or rehabilitate it. Fortunately, Legacy Park Mortgage’s vast network of lenders and loan programs include options such as a Hard Money Loan that may be your best, if not only, option for acquiring these high-potential properties.

Basic Overview of a Hard Money Loan
Also known as a private mortgage, this loan is provided by an individual or group rather than a formal financial institution, thus lacking the usual lending requirements and guidelines. They are usually less strict about financial risk and creditworthiness, making them ideal for borrowers who would otherwise have difficulty qualifying for other loans, or who want to close quickly and cannot wait for a long qualification process.

What a Hard Money Loan Typically Requires
The main requirement to qualify for this type of mortgage is often based on the amount of equity or rehabilitation potential of the property, making it a great choice for investors seeking opportunities in non-owner-occupied real estate. The following are among the more common features and requirements of the average hard money loan:

  • Minimum loan amount of $100,000.
  • Available only for investment properties.
  • Applies to wide variety of property types – single family homes (SFH), condos, one to four units, and multifamily developments.
  • Can be used for purchases, refinances, cash-out, or rehabilitation.
  • Usually no appraisal – instead, the lender will rely on a broker’s price opinion (BPO), which is comparatively faster and easier.
  • Need only stated income, rather than income verification.
  • No minimum FICO score required.
  • No seasoning requirements.
  • Terms of one to four years.
  • Loan-to-Value (LTV) ratio of up to 80% (or up to 100% with rehab financing).
  • Interest rates from 8.5%.
  • Must typically close close in four to ten days after the full loan package is compiled.

Additionally, a hard money loan will usually charge high fees to make up for their otherwise lax qualifications. There is a lot of risk involved if you don’t know where to look and what to look for, which is why getting in touch with a mortgage broker is so crucial.

Contact Legacy Park Mortgage Today
At Legacy Park Mortgage, we pride ourselves in offering a myriad of loan programs and options to our clients. Our vast network of funding options includes private / hard money lenders with whom we have a lot of experience and an excellent working relationship. We can show you the way with honest and personalized advice – just contact us at info@legacyparkmortgage.com or at (305) 901-1791.