Hard money lending
Short-term capital for US investment property — from abroad.
Hard money loans are asset-based, short-term loans for buying, renovating or bridging investment property. We explain how lenders size the loan and what cash you really need, then connect eligible foreign-national and ITIN investors with third-party private lenders. Requirements vary by lender and product.
- Use
- Investment property only
- Term
- Short-term, typically months
- Sized on
- The property and the plan
Common strategies
Fix-and-flip and bridge financing
-
Fix-and-flip
Buy a property below market value, renovate it, and sell. The loan typically funds part of the purchase and part of the rehab budget.
-
Bridge
Close quickly on a purchase or refinance, then move to longer-term financing — such as a DSCR loan — once the property is stabilized.
-
Investing from abroad
Foreign-national and ITIN investors typically need a US entity, valid passport or ID, and proof of funds for the down payment and reserves.
How the loan is sized
LTC vs. LTARV
Lenders usually cap the loan in two ways and use the lower result. Loan-to-cost (LTC) compares the loan with what you pay: purchase price plus renovation budget. Loan-to-after-repair-value (LTARV) compares the loan with the appraised value once the work is done.
A deal with a strong after-repair value can still be limited by LTC, and a deal with a low purchase price can be limited by LTARV. Running both numbers early shows how much cash you must bring.
| Measure | Loan-to-cost (LTC) | Loan-to-ARV (LTARV) |
|---|---|---|
| Compares the loan with | Purchase price + rehab budget | Appraised value after renovation |
| Protects the lender against | Overpaying or an inflated budget | An over-optimistic resale value |
| You should check | That your budget is realistic and documented | That comparable sales support the ARV |
Inside the loan
Draws, interest reserve and points
-
Construction draws
Rehab funds are usually held back and released in draws after an inspection confirms the work is done. You often pay contractors first and get reimbursed.
-
Interest reserve
Some lenders set aside part of the loan to cover monthly interest during the project. It reduces cash you need monthly but increases the loan amount you pay interest on.
-
Points and fees
Origination points are a percentage of the loan paid at closing. Add underwriting, appraisal, draw-inspection and legal fees to your budget.
-
Exit costs
Plan for sale commissions, closing costs, extension fees if the project runs long, and any prepayment terms.
Know your numbers
Cash to close vs. total project cash
Cash to close is what you wire at closing: the down payment on the purchase, points, fees and any prepaid items. Total project cash is larger. It also includes rehab costs you pay before draws are reimbursed, monthly interest if there is no reserve, holding costs such as insurance, taxes and utilities, and a contingency for overruns.
Many first-time investors plan only for cash to close. Budget for total project cash so the project is not stalled waiting for a draw.
What lenders typically ask for
Funding options for eligible ITIN holders and foreign-national investors. Requirements vary by lender and product.
- US entity
- Many lenders require the property to be held in a US LLC or corporation.
- Identification
- Valid passport, and an ITIN or other identification depending on the lender.
- Proof of funds
- Bank statements showing the down payment, closing costs and reserves; foreign funds may need to be seasoned in a US account.
- Deal documents
- Purchase contract, scope of work and renovation budget, and comparable sales supporting the ARV.
- Experience
- A track record of past projects can affect leverage and terms. Typical; varies.
Typical requirements only; each lender sets its own criteria and makes its own decision. tsmartcash is not a lender.
Hard money project calculator
Adjust the inputs to estimate the loan amount, cash to close and total project cash for a fix-and-flip or bridge deal.
Deal
Loan limits
Pricing & timing
Costs
Illustrative estimates only — not a loan offer, rate quote or commitment to lend.
Hard money FAQ
Can a foreign national get a hard money loan in the US?
Some private lenders work with foreign-national and ITIN investors, usually through a US entity. Requirements vary by lender and product, and approval is never guaranteed.
What is the difference between LTC and LTARV?
LTC compares the loan with your purchase price plus rehab budget. LTARV compares it with the appraised value after repairs. Lenders typically apply both and lend the lower amount.
How do construction draws work?
Rehab funds are held by the lender and released in stages after an inspection confirms completed work. Plan to pay for each stage before reimbursement.
What is an interest reserve?
An amount set aside from the loan to pay monthly interest during the project. It eases monthly cash needs but increases the borrowed amount.
Can I use a hard money loan for a home I will live in?
No. These loans are for investment and business-purpose properties. For a primary residence, an international mortgage through a licensed partner may be an option.
How do I exit a hard money loan?
Usually by selling the property or refinancing into longer-term financing, such as a DSCR loan, once it is renovated and rented. See our refinance and construction options.
Have a property under contract?
Share the purchase price, rehab budget and target ARV. We will help you understand the cash you need and connect you with lenders.