Lending
Hard Money Loans in the Sacramento Region
Short-term private loans based mainly on the property, for investors buying fixers, flips or a bridge to the next loan.
Talk to Maggie directly: cell (916) 549-3131 (text or call) · maggie@loveyoursurroundings.coMaggie B. Hopkins, NMLS #349517 · Surroundings NMLS #2528307
What is a hard money loan?
A hard money loan is a short-term loan from a private lender or investor group, based mainly on the value of the property. It's sometimes called private money. The lender cares most about the property and your plan for it, and less about your income.
Hard money is usually used for investment property. Terms are short, often measured in months or a few years rather than decades. It is one of the Non-QM loans we arrange.
Who uses hard money loans?
Mostly investors. Common uses include:
- Fix-and-flip. Buying a home that needs work, renovating it and selling it.
- Buy, fix and rent. Buying a fixer, renovating it, renting it out and then refinancing into a longer-term loan.
- Bridge loans. Covering the gap when you need to buy before another property sells or before long-term financing is ready.
- Homes a standard lender won't finance yet, because of condition or a timeline that's too short for a regular loan.
It is not usually for a home you'll live in. Most hard money lenders make business-purpose loans only. Federal Regulation Z exempts credit made mainly for a business purpose, and its commentary treats loans on rentals that aren't owner-occupied as business purpose (12 CFR 1026.3(a) and comment 3(a)-4, checked October 22, 2026). If you plan to live in the home, a standard loan or a bank statement loan is the place to look.
What does a hard money lender look at?
Every private lender sets its own rules. Most will look at these:
- The property. Its value today and, for a fixer, its expected value after repairs.
- Your down payment. Private lenders usually want you to have real money in the property.
- Your scope and budget. For a renovation, a written list of the work, the cost and the timeline.
- Your experience. Some lenders give better terms to investors who have completed similar projects.
- Your exit strategy. How you'll pay the loan off, whether by selling or by refinancing.
Some lenders hold back the repair money and release it in stages as work is finished. Ask how draws work and how long each one takes. A slow draw can stall a project.
What does a hard money loan cost compared with other loans?
Hard money is one of the more expensive ways to borrow. Rates are generally higher than on bank and Non-QM loans, and lenders often charge points and fees up front. You pay for speed, flexibility and a lender willing to finance a property others won't.
Because terms vary so much from one private lender to the next, comparing several matters. We lay out each offer's rate, points, fees, term, extension costs and any prepayment penalty in dollars. Ask for every term in writing, since business-purpose loans may not come with the same disclosures as a home loan.
Why do you need an exit strategy?
A hard money loan is meant to be paid off soon. The exit is how you'll do it. Usually that means selling the property or refinancing into a longer-term loan, such as a DSCR loan for a rental.
Plan the exit before you borrow. Ask yourself what happens if the work takes longer, costs more or the home sells for less than you expected. Find out what an extension would cost if you need more time. A project that runs past the loan's term can get expensive in a hurry.
Maggie B. Hopkins has been a landlord for 11 years and is a real estate broker as well as a mortgage broker. She can help you check the after-repair value, the rent and the refinance plan before you commit.
What are the risks and trade-offs?
- High cost. Every extra month adds interest. Delays hurt more here than with any other loan.
- Short term. If you can't sell or refinance in time, you may face extension fees or the risk of losing the property.
- Construction surprises. Older homes can hide problems. Build a cushion into the budget and the timeline.
- Market changes. Prices and rates can move during your project and change your exit.
What are the alternatives to a hard money loan?
- A conventional investment property loan, if the home is in livable condition and you have time to close on a regular schedule. It generally costs much less.
- A DSCR loan, if the property can rent now and the rent covers the payment.
- A cash-out refinance or home equity line on property you already own, to fund a purchase or repairs. Make sure you understand the risk to the property you borrow against.
- A 1031 exchange, if you're selling one investment property to buy another. Ask your tax advisor whether it fits your plan.
How do you start a hard money loan?
Fill out the loan options form or call Maggie's cell at (916) 549-3131. Tell us about the property, the purchase price, your repair budget and how you plan to pay the loan off.
Maggie shops private lenders along with bank and Non-QM lenders, so you can see whether hard money is the right tool or whether a lower-cost loan would work. You're always free to use any lender you like. Bring your scope of work, contractor bids if you have them and statements for the money you'll bring to closing.
Frequently Asked Questions
What is the difference between hard money and private money?
The terms are often used the same way. Both describe short-term loans from private lenders or investors, based mainly on the property rather than your income.
Can I use a hard money loan to buy a home I'll live in?
Usually not. Most hard money lenders make business-purpose loans for investment property only. If you plan to live in the home, look at standard or bank statement loans instead.
How long does a hard money loan last?
They are short-term loans, often months to a few years. The exact term depends on the lender, so ask about the term and what an extension would cost before you sign.
Why are hard money loans more expensive?
The lender takes on more risk, lends on properties others won't and moves on a shorter timeline. Rates and up-front fees are generally higher than on bank and Non-QM loans.
What is an exit strategy?
It is your plan to pay off the loan, usually by selling the property or refinancing into a longer-term loan such as a DSCR loan. Plan it before you borrow.
Talk to Maggie directly: cell (916) 549-3131 (text or call) · maggie@loveyoursurroundings.coMaggie B. Hopkins, NMLS #349517 · Surroundings NMLS #2528307
Loans are arranged through Maggie B. Hopkins, NMLS #349517 · Surroundings NMLS #2528307. This is not a commitment to lend. All loans subject to credit approval and property qualification. Equal Housing Lender.
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