Depending on your situation a Hard money lender can be worth using, but they come with pros and cons. They offer fast, asset-based loans with flexible terms, making them ideal for real estate investors, house flippers, and some commercial property owners. However, they often come with higher interest rates, short repayment periods, and additional fees. Whether they are worth it depends on your situation, time frame, credit score and ability to manage the loan’s terms effectively.

When looking for a hard money lender in Washington DC, compare their reputation, location, and loan terms. Referrals from other investors are a great way to find hard money lenders or private lenders. Most lenders attend real estate investor groups. Including the Real Estate Investing Incubator Meetup Group. Mortgage Brokers also work with direct lenders, Real Estate Agents, and Title Companies. Finally, you can search for ‘hard money lenders near me’ online. Make sure to check their online reviews and if they are local.

Getting a hard money loan in Washington DC is relatively easy compared to traditional financing since the approval process is based more on the property’s value or viability of the overall project than credit and income history. Most lenders will require down payment funds, a clear exit strategy to repay the loan, and typically have higher interest rates than banks (e.g., 12-14%). The approval process and overall transaction are usually much faster than a bank (ex.. a few days instead of a few weeks)

A good interest rate for a hard money loan typically falls between 10% and 16%, though rates can vary based on the lender, loan-to-value (LTV) ratio, borrower experience and credit score. Points (upfront fees) usually range from 2% to 6% of the loan amount. While hard money loans have higher rates than traditional mortgages, securing a lower rate depends on other qualification factors including lower LTV ratios.

Yes, most hard money lenders require a down payment, typically ranging from 10% to 30% of the property’s purchase price. The exact amount depends on factors like the lender’s risk tolerance, credit score, the loan-to-value (LTV) ratio and the borrower’s experience. In some cases, experienced investors or those securing properties well below market value may negotiate lower down payments or even 100% financing with additional collateral.

Most hard money lenders that use private capital don’t require a standard appraisal. However, they may use a broker price opinion (BPO), an internal valuation, or a comparative market analysis instead of a full formal appraisal. The focus is primarily on the property’s value rather than the borrower’s credit history. Banks and institutionally backed lenders typically require a full appraisal.

Hard money lenders typically do not focus on income in the same way banks and institutionally backed lenders do. Instead of verifying employment or debt-to-income (DTI) ratios, they primarily base approval on the property’s value and the borrower’s equity or down payment. However, lenders typically still check income or request bank statements to ensure the borrower can cover loan payments and down payment funds, especially for larger loans or long-term financing.

Yes, hard money lenders place a lien on the property being financed. This is through a Mortgage or Deed of Trust. This serves as collateral for the loan, giving the lender the right to foreclose on the property if the borrower defaults. The lien is typically in the first position, meaning the lender gets paid first in a foreclosure.  This is standard in every state including Washington DC.

No, not all hard money lenders require a down payment, but most do. Standard down payments range from 10% to 30% of the purchase price. However, some lenders offer higher financing if the borrower has:

• Cross-collateral (e.g., other properties with equity)
• Strong real estate experience
• A low loan-to-value (LTV) ratio (buying well below market value)
• A proven track record with the lender

Hard money lenders (that lend their own funds) have no minimum credit score because they focus more on property value and overall real estate projects. Although lower scores may still qualify for a loan, you can expect higher rates and larger down payments if credit is low. The lender usually prioritizes the property value, borrowers equity and down-payment instead.

Most true hard money lenders and private lenders don’t do appraisals. They might do internal inspections, valuations or Broker Priced Opinions (BPO) but not full appraisals. Usually a hard money lender will commit to proceeding with the loan unless a major situation comes up and their are title issues, the property condition was way worse then expected or credit score is way less than disclosed.

Hard money lenders determine the After-Repair Value (ARV) by analyzing comparable sales (comps) of similar properties and assessing local market trends. They review the borrower’s construction scope, including renovation plans and budget. They may also use a broker price opinion (BPO) or a professional appraisal or Realtor to estimate the property’s potential value after improvements. Additionally, a borrower’s experience with past real estate projects can influence the lender’s assessment. Typically, lenders offer loan amounts between 55% and 65% of the ARV to maintain a safety margin against market fluctuations.

Most hard money lenders that use private capital don’t require a standard appraisal. However, they may use a broker price opinion (BPO), an internal valuation, or a comparative market analysis instead of a full formal appraisal. The focus is primarily on the property’s value rather than the borrower’s credit history. Banks and institutionally backed lenders typically require a full appraisal.

Yes, hard money lenders do provide pre-approval letters or proof funds letters but they typically need some information from the borrower first. Since hard money loans focus on collateral they usually want to know what property the borrower is interested in purchasing first. The pre-approval process is usually very quickly and sometimes within 24 hours.

Hard money lenders have no minimum credit score because they focus more on property value and overall real estate projects. Although lower scores may still qualify for a loan, you can expect higher rates and larger down payments if credit is low.

Approval for a hard money loan is typically very fast, often within a day or two, and funding can be completed in a few days or whenever title work is completed. Make sure to ask your hard money lender upfront how quickly they can close.