What Is a Hard Money Lender, and When Do Investors Use One?
January 6, 2026
Hard money lenders are typically private lenders that specialize in short-term, high-risk real estate projects. These loans are commonly used for:
- Heavy rehab projects
- Properties in distressed condition
- Borrowers with challenged credit
- Transitional assets not yet stabilized
Because of the increased risk, hard money loans usually come with:
- Short loan terms
- Higher interest rates
- Higher fees
- Interest-only payments
Hard money loans are not designed for long-term holds or stabilized properties—but they can be powerful tools when speed and flexibility matter most.
It’s important to note that lending categories often overlap. For example, a private lender may offer both DSCR loans and hard money loans, or a bank may offer both conventional and Non-QM products. The key is understanding which tool best fits your investment strategy.
