Advice About Hard Money Loan Programs | Valor Lending Group

Valor Lending Group is here to give you advice on hard money loan programs.

We will answer any questions or concerns that you may have and we will be with you every step of the way through your loan process.

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We are excited for the opportunity to serve up EVERY loan in the book to the residents of the beautiful sunshine state and look forward to raising the bar in mortgage loan financing!

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A) What is Hard Money?

Typically hard money lenders are private investors, investor groups, pools of funds, life insurance companies and even pension and retirement funds. Hard money loans are an alternative to traditional bank lending that allows flexibility and expediency. As a result, hard money lenders and hard money loans are not required to conform to the same guidelines as traditional financing, such as the standardized Fannie Mae and Freddie Mac underwriting guidelines for loans to be repackaged and sold on Wall Street.

A hard money loan is a loan that is secured by a “hard” asset – i.e., real property. Hard money lenders secure their loans with real property as collateral, they are most concerned with a borrower’s equity in the property (or down payment for a purchase). The maximum amount a hard money lender is willing to extend – or leverage – is based on a percentage of the property’s value. Hard money lenders are most concerned about the Loan-to-Value (“LTV”), which is the loan amount divided by the value of the property.

B) Why Use Hard Money?

Every well-equipped borrower’s toolbox should have a reputable hard money funding source. Even though banks are often able to offer lower rates, banks do not offer hard money loans, because their loan programs don’t allow for the same flexibility that hard money lenders can afford. In addition, traditional lenders have loan committees and a more involved underwriting process and it is not unusual for both of these to delay the loan process. Hard money loans bridge borrowers from one type of financing to another.

There are 2 main reasons to use hard money loans:

  1. Speed
  2. Temporary Financing Solutions

1) Speed: Same-as-Cash Purchasing Power One of the main reasons to use hard money loans is their speed. Hard money loans can be closed much quicker than traditional loans, offer in 1-2 weeks, sometimes quicker. Some of the best hard money lenders are able to make their underwriting decisions and issue a term sheet on the first phone call, and some are even able to fund loans in 24 hours! For those needing a quick close with minimal documentation, hard money loans are a great fit. 

2) Temporary Financing Needs Hard money loans are more simple and quicker than traditional loans. There are two main categories of temporary financing situations in which hard money loans make sense:

  1. Property needs to be stabilized
  2. Borrower’s financials need to be stabilized

(a) Value-Add / Property Stabilization / Fix-n-Flips / Construction

Hard money loans are particularly well-suited for situations in the financed property needs to undergo some kind of renovation. This can range from cosmetic upgrades to full gut rehabs and rebuilds. The issue for borrowers in these situations is that traditional lenders base their funding decisions on the current value of a property.

Hard money lenders, on the other hand, are willing to base their funding decisions (at least in part) on the future value after renovated value (“ARV”) of the property. Hard money lenders are willing to lend on the riskier, future expected revenue of a property, because they mitigate their risk with a lower LTV and charge higher rates.

Fix-n-flips are a classic situation in which a hard money loan makes financial sense. In these situations, the loan is based on the after-renovated value. Once the property is finished being rehabbed, and realizes its full income-producing capacity (“stabilized”), the hard money loan can be paid off in 1 of 2 ways: sell the property, or refinance with a traditional lender now that the as-is value supports the loan.

(b) Borrower Financials Currently Less Than Perfect

Hard money lenders are far less concerned with credit issues such as foreclosures, bankruptcies, late mortgage payments, etc., and have less stringent underwriting guidelines.

There are times when a borrower is simply unable to provide documental traditional lenders require, whether due to the nature of their business, or the fact that tax returns may not be an accurate reflection of the current financial situation.

Hard money lenders are willing to look past such credit issues where there is enough equity in the property, or a borrower has enough access to capital to make payments on the debt.

Hard money lenders typically do not want tax returns or employment/income info. If there is significant equity remaining in the property after the hard money loan is accounted for, some hard money lenders will refinance a property with nothing more than a Driver’s License, Preliminary Title Report, and a visual inspection of the property (a “drive-by appraisal”).

1) Types of Hard Money Loans

(a) Fix-n-Flips, Commercial Value Adds, and Construction Loans

Fix and flips, value adds, and other distressed properties, as well as construction loans, can be difficult to finance using traditional lenders such as banks because these types of properties are inherently risky. This is a prime example of where hard money loans can be used.

Construction projects are by nature short-term, and usually, these types of hard money loans are for terms of 18-36 months. Hard money construction loans are used to cover the cost of labor and materials for the development project, and sometimes also the land acquisition.

(b) 1-4 Unit Residential Purchase and Cash Out Hard Money Loans

Generally hard money loans are used to purchase 1-4 united residential properties quickly because their speed often provides same-as-cash purchasing power.

In addition, many investors utilize the equity in their property by “cashing out,” or placing a lien on property in exchange for cash proceeds.

(c) Commercial Hard Money Loans

Also, hard money loans are used for multi-family apartments, commercial, industrial, retail, raw law, and many other property types.

Advantages and Disadvantages of Hard Money Loans:

1) Pros of Hard Money Loans

2) Cons of Hard Money Loans

Bridge Loan Options | Valor Lending Group

 3 Options | Typically without an appraisal**

Valor Bridge Owner Occupied:

Do you need to pull cash out of your primary residence for a business purpose?

*Owner occupied for California Properties ONLY

Valor Investment Property | Non owner occupied:

Property being used as the borrowers investment property.

Valor Cross- Collateral Loan:

Do you have a portfolio with properties that have available equity? 

**no Appraisal Subject to lender discretion on a case by case basis

Fix and Flip Loans | Valor Lending Group

Are you looking to purchase an investment property to fix-n-flip?

Valor Lending Group can help you with all of your rehab loan needs.

Construction loan options HERE


What Are Fix and Flip Loans? 

Fix and Flip loans are hard money loans used to purchase and rehab a property, and then resell it at a higher value or refinance into long term financing

Rehab Loan Highlights:

Needs for Quote:

  1. Property Address:
  2. Purchase Price (for Purchase):
  3. “As is” Value:
  4. After Repair Value
  5. Current Balance (for Refinance):
  6. Rehab Budget & Detailed Cost Breakdown
  7. Project Experience as a Sponsor
  8. Approx Credit Score:
  9. Vesting in and Entity or Individual name:

Ground Up Construction Highlights:

Other Programs Available:

CALL or EMAIL ME for immediate attention to your scenario!

Valor Lending Group can fund your fast-hard money loan up to $10mm in as little as 7 days often without an appraisal.

Valor Lending Group offers EVERY mortgage loan in the book!

Please do not hesitate to call on me for any scenarios. 

I look forward to an opportunity to demonstrate my prompt and professional service.

Recap of our Loan Products:
  1. Hard Money Loans (20% down / minimal documentation) Typically Fund in 7-10 days.
  2. Stated Income Loans (Great for business owners and self-employed ) No tax returns!
  3. 100% financing is available (we can cross collateralize other properties if there is enough equity)
  4. Valor VA Home Loan 100% financing up to $1.5M
  5. Investor Cash Flow Loan – No tax returns or DTI calculation! Based on subject property cash flow
  6. Flipper & Rehab Loans (Flip a property with one of our many options)
  7. 2nd Position Loans up to $5mm
  8. Raw Land & Lot Loans
  9. Ground up Construction for spec homes, custom homes and commercial ground up.
  10. Farms, Vineyards, Ranches and Agricultural Properties (25-30% down)
  11. 10% down Jumbo’s with NO MI up to $2M
  12. Manufactured Housing / Mobile Homes (20% down / 600+ credit score)
  13. Acreage Properties
  14. Commercial Loans up to $500M
  15. 3% & 5% down Conventional Loans – LPMI (Lender paid mortgage insurance)
  16. Foreign Nationals Loans (no social security or residency required)
We also offer:
  1. 10, 15, 20, 25, 30 year Fixed, Conventional Conforming Loans
  2. High Balance Conforming aka Super Conforming
  3. Jumbo’s to $25M / Super low rates! / 10% down Jumbo to $1.5M
  4. FHA, USDA
  5. ARM’s
  6. Reverse mortgages up to $3M Value
  7. Refinance including Cash Out

**Rates and terms subject to change without notice

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Valor Lending Group

We Offer Every Mortgage Loan in the Book


Valor Lending Group
CA DRE #02026238  |  NMLS #1600345

Petco Park DiamondView Tower
350 10th Ave | 10th Floor
San Diego, CA 92101
Office: (619) 344-2640
Fax: (619) 872-2400

Arizona Branch

Valor Lending Group, Inc.
Branch ID# 2245288 | MB-1030262

Eagle Ridge
1548 Hawkeye Ridge Ave
Prescott, AZ 86301
Office: (619) 344-2640
Fax: (619) 872-2400