--- title: What is a Hard Money Loan? description: This short blog post explains what a Hard Money Loan is and why real estate investors use them for their projects. image: https://www.fctd.com/hubfs/What%20is%20a%20Hard%20Money%20Loan.jpg --- 1 min read # What is a Hard Money Loan? [![Picture of Ted Spradlin](https://www.fctd.com/hubfs/Ted%20Spradlin-1.png) Ted Spradlin ](https://www.fctd.com/blog/author/ted-spradlin) : Sep 29, 2022 6:00:29 AM [Hard Money Loans](https://www.fctd.com/blog/tag/hard-money-loans) [Private Money Loans](https://www.fctd.com/blog/tag/private-money-loans) [New To Hard Money? Start Here](https://www.fctd.com/blog/tag/new-to-hard-money-start-here) ![What is a Hard Money Loan?](https://www.fctd.com/hubfs/What%20is%20a%20Hard%20Money%20Loan.jpg) A hard money loan is a short-term asset-based, or equity-based, loan secured by real estate and funded by one or multiple private investors, rather than conventional lenders such as banks or credit unions. Hard money loans are generally used by real estate investors as a short-term [bridge loan](https://www.fctd.com/bridge-loans) with a duration of three months to three years, after which the investor will either sell or refinance the property. The monthly payments are usually interest-only with a [balloon payment](https://www.fctd.com/blog/hard-money-loan-balloon-payment) due at the end of the term. Some hard money loans, like [construction loans](https://www.fctd.com/construction-loans), have a built-in interest reserve to service the debt during the loan period. Asset-based hard money loans place emphasize property value over the buyer’s credit — though credit is a consideration. A hard money loan may not always require an appraisal. Some lenders will do their own due diligence followed by a site inspection of the property, rather than ordering an appraisal. Real estate investors obtain hard money loans through mortgage brokers or directly from a hard money lender. There are several types of [hard money lenders](https://www.fctd.com/blog/different-types-hard-money-lenders), including private individuals, multiple lenders funding one Note, a family office, conduit mortgage lenders or mortgage funds. Most hard money lenders have a real estate or finance background and are familiar to the local markets where they lend money. [![](https://www.fctd.com/hubfs/Guide%20To%20Hard%20Money%20Loans.jpg) ](https://www.fctd.com/guide-to-hard-money-loans) - [Tweet](https://twitter.com/share) [![Hard Money Loans: Business Purpose Versus Consumer Purpose](https://www.fctd.com/hubfs/Imported_Blog_Media/California-Home.jpg) ](https://www.fctd.com/blog/hard-money-business-purpose-consumer-purpose) #### [Hard Money Loans: Business Purpose Versus Consumer Purpose](https://www.fctd.com/blog/hard-money-business-purpose-consumer-purpose) ![Picture of Ted Spradlin](https://www.fctd.com/hs-fs/hubfs/Ted%20Spradlin-1.png?width=30&name=Ted%20Spradlin-1.png) [Ted Spradlin](https://www.fctd.com/blog/author/ted-spradlin) : Mar 15, 2016 2:12:18 PM If you’re online searching for a hard money loan to solve your particular financial problem, it’s important to know if your financing scenario is for... [Hard Money Loans](https://www.fctd.com/blog/tag/hard-money-loans) [Private Money Loans](https://www.fctd.com/blog/tag/private-money-loans) [New To Hard Money? Start Here](https://www.fctd.com/blog/tag/new-to-hard-money-start-here) [Read More](https://www.fctd.com/blog/hard-money-business-purpose-consumer-purpose) [![Who Is Not a Good Fit for a Hard Money Loan?](https://www.fctd.com/hubfs/Who%20is%20Not%20a%20Good%20Fit%20for%20a%20Hard%20Money%20Loan.jpg) ](https://www.fctd.com/blog/-not-good-fit-for-hard-money-loan) #### [Who Is Not a Good Fit for a Hard Money Loan?](https://www.fctd.com/blog/-not-good-fit-for-hard-money-loan) ![Picture of Ted Spradlin](https://www.fctd.com/hs-fs/hubfs/Ted%20Spradlin-1.png?width=30&name=Ted%20Spradlin-1.png) [Ted Spradlin](https://www.fctd.com/blog/author/ted-spradlin) : Jan 15, 2023 2:59:32 PM Every week, FCTD receives inquiries from people who are not good matches for hard money loans. It's important to remember that hard money loans are... [Hard Money Loans](https://www.fctd.com/blog/tag/hard-money-loans) [Private Money Loans](https://www.fctd.com/blog/tag/private-money-loans) [New To Hard Money? Start Here](https://www.fctd.com/blog/tag/new-to-hard-money-start-here) [Read More](https://www.fctd.com/blog/-not-good-fit-for-hard-money-loan) [![5 Common Mistakes to Avoid with Hard Money Loans](https://www.fctd.com/hubfs/5%20Common%20Mistakes%20to%20Avoid%20with%20Hard%20Money%20Loans.jpg) ](https://www.fctd.com/blog/5-common-mistakes-to-avoid-with-hard-money-loans) #### [5 Common Mistakes to Avoid with Hard Money Loans](https://www.fctd.com/blog/5-common-mistakes-to-avoid-with-hard-money-loans) ![Picture of Ted Spradlin](https://www.fctd.com/hs-fs/hubfs/Ted%20Spradlin-1.png?width=30&name=Ted%20Spradlin-1.png) [Ted Spradlin](https://www.fctd.com/blog/author/ted-spradlin) : Jan 19, 2023 2:12:37 PM Hard money loans are a popular option for borrowers to quickly fund real estate projects with minimal documentation. However, these loans come with... [Hard Money Loans](https://www.fctd.com/blog/tag/hard-money-loans) [Private Money Loans](https://www.fctd.com/blog/tag/private-money-loans) [New To Hard Money? Start Here](https://www.fctd.com/blog/tag/new-to-hard-money-start-here) [Read More](https://www.fctd.com/blog/5-common-mistakes-to-avoid-with-hard-money-loans) ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Ted Spradlin", "url" : "https://www.fctd.com/blog/author/ted-spradlin" }, "dateModified" : "2023-09-23T21:15:18.604Z", "datePublished" : "2022-09-29T13:00:29.000Z", "headline" : "What is a Hard Money Loan?", "image" : [ "https://www.fctd.com/hubfs/What%20is%20a%20Hard%20Money%20Loan.jpg" ], "mainEntityOfPage" : { "@id" : "https://www.fctd.com/blog/what-is-hard-money-loan", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://www.fctd.com/hubfs/FCTD%20Logo.png" }, "name" : "First Capital Trust Deeds" } } ```