The Quick Read: A hard money loan is financing, not cash, so a lender’s letter shows borrowing capacity and never proves you hold the cash to close. Sellers who read “cash offer” expect a bank or brokerage statement in the buyer’s own name, and a lender letter does not satisfy that expectation.
- A hard money letter is a conditional pre-approval. It is not a commitment to fund.
- Write the offer as financed, attach the letter, and show your own funds for the down payment and closing costs.
- The name on the letter, the contract, and the account must match.
- Tell the title company about the lender early, because a recorded mortgage must be prepared.
- Mislabeling a financed offer as cash can cost you your earnest money.
You can still make a strong offer with hard money. You just have to label it honestly and build the document stack properly. This guide walks through what each document does, what underwriters and sellers look at, and where the usual rules bend.
What this loan actually costs to carry.
Hard money is sized against the project and priced by time. Enter the deal and see how much the program will lend, the cash required at closing, the carry while you hold it, and what is left at the exit.
Leverage tiers on the current program: 85% with fewer than 2, 90% with 2 or more, 93% with 5 or more completed projects — every tier capped at 75% of after-repair value. Loan amounts up to $5,000,000, larger by exception; terms of 6 to 18 months, interest-only, no prepayment penalty. The rehab portion funds in draws against completed work, not at closing.
Program parameters shown update from Lendmire’s centralized guideline source. Rate, points, and months are editable assumptions, not quoted terms.
Cost cap sets the loan · positive spread
Illustrative estimate only — not a quote, Loan Estimate, approval, or commitment to lend. Rate, points, and months are editable assumptions. Hard money is business-purpose financing for real estate investors, not a consumer mortgage. Leverage on the current program tops out at 93% of project cost for investors with a documented track record, capped at 75% of after-repair value, with rehab funding up to 100% of the documented budget released in draws; actual terms vary by lender, borrower experience, property, and exit. Lendmire is a mortgage broker, not a lender.
Is a Hard Money Loan Cash?
No. A hard money loan is a loan, and the lender’s money arrives only after underwriting conditions are met. Cash means the buyer already holds the funds.
Seller-side agents see this distinction daily. A cash offer promises there is no lender to disappoint anyone. A financed offer has a lender, an appraisal or collateral review, and a title process. Calling a financed offer “cash” strips out that honesty, and it is the fastest way to lose a seller’s trust.
Here is the practical rule: if a lender is funding any part of the purchase, write the offer as financed. Then make the financing look as solid as the facts allow. Strong, honest presentation beats a clever label that collapses at closing.
Proof of Funds, Pre-Approval, and Commitment: Three Different Documents
These three terms get used loosely, even by lenders. They are not the same thing.
| Document | What it shows | Who issues it | Does it obligate funding? |
|---|---|---|---|
| Proof of funds (true) | Money you hold now | Bank or brokerage | N/A, funds already yours |
| Pre-approval letter | Lender will lend up to a stated amount if conditions are met | Lender | No |
| Commitment | Lender has underwritten and agreed to fund | Lender | Yes, subject to stated conditions |
A hard money lender’s letter is almost always a pre-approval. It says the lender has reviewed you and the deal and will lend up to a stated amount if conditions are met. Many people call it a proof of funds letter, and the label is loose. What matters is how you describe it to the seller.
What a Hard Money Lender’s Letter Should Contain
A letter that gets read seriously carries a handful of specific elements. Skip one and the seller’s agent has a reason to dismiss it.
| Element | Why it matters | Common error |
|---|---|---|
| Lender name and contact details | Lets the agent verify it | Generic or missing phone |
| Buyer or entity name | Ties the letter to your offer | Name differs from the contract |
| Amount | Shows capacity | Amount below the offer price |
| Date | Shows the letter is current | Stale or undated |
| Signature | Shows a person stands behind it | Unsigned template |
| Key loan terms | Sets honest expectations | Overstated certainty |
Sellers want a recent date. No single standard validity window exists, so treat a fresh letter as better than an old one.
The amount deserves care. If underwriting, an appraisal, or a scope change moves the approved number after the letter is issued, your offer can outrun your financing. Request a letter sized to the real deal, not the biggest figure you can get.
Your Own Funds Still Matter
A lender letter covers what the lender will advance. It says nothing about the cash you bring yourself.
On our network’s hard money programs, fix-and-flip leverage runs 85% of project cost with fewer than 2 completed projects, 90% of project cost at 2 or more, and 93% at 5 or more, with every tier capped at 75% of after-repair value. Bridge purchases without rehab go up to 80% of purchase price. Cash-out and rate/term refinances go up to 65% of value. All of this varies by lender, property, and experience, and nothing here is a commitment to lend.
So you will almost always need to show cash in the deal. There is no true 100% purchase program. Up to 100% of a rehab budget can fund in draws against completed work, but that is a rehab-budget figure, never a purchase loan-to-value. Anyone telling you a lender covers the whole purchase is describing a rare exception or a misunderstanding.
What counts as your own proof of funds:
- Bank or brokerage statements showing liquid balances in the buyer’s name
- A statement from the same entity that is making the offer
- Evidence of the down payment and closing costs, held separately from the loan
What weakens it:
- Funds sitting in someone else’s name
- Screenshots or pasted-letterhead PDFs
- Statements that don’t match the contracting entity
Using a third party’s account is a recognized weakness. That person may not want to be on the offer or carry the risk. If you are a wholesaler, you generally need a letter from your end buyer, or a lender’s letter as a last resort.
The Documents to Assemble, Step by Step
Think of the stack in layers: what goes with the offer, and what waits for underwriting.
At the offer:
1. The lender’s pre-approval letter, dated recently and sized to the deal
2. Your own statement showing the down payment and closing costs
3. The offer written in the buyer’s name, meaning the buyer or the LLC or other purchasing entity
4. Honest wording that the purchase is financed
During underwriting:
1. Entity documents for the purchasing entity
2. The property details, scope of work, and exit plan
3. Credit and experience information (the network typically looks for a 620 minimum score, with added conditions below 660, and underwriting stays asset-based)
4. Title and insurance items
How the request works: you bring the deal, the purchasing entity name, and your background to the lender. The lender reviews the file, confirms the down payment and cash to close, and can then issue a letter stating exactly that. Entity names should be identical across the letter, the contract, and the closing documents. If you assign the contract or switch entities, update the letter before it reaches the seller.
How to Word a Financed Offer So It Stays Strong
Honesty and strength are not opposites. A financed offer reads well when it removes the seller’s fears one by one.
- Disclose the financing plainly. State that a lender is involved and attach the letter.
- Show real skin in the game. Your own funds for the down payment signal you can absorb surprises.
- Make the lender reachable. Agents trust a letter more when the issuer answers a call.
- Keep contingencies lean. Only promise what you can deliver. Some investors mark the offer non-contingent and state there is no appraisal condition, but that promise only works if you can close with your own money should the lender not fund. Never make it casually.
- Pick a close date you can meet.
The risk of mislabeling is concrete. A deal that falls apart because “cash” turned out to be a loan can cost you your earnest money and waste the seller’s time. Knowingly faking a proof-of-funds letter can also create fraud exposure, and a seller may pursue you if the deal fails for lack of funds.
Tell the Title Company Early
Do not send a “cash” offer to title and then reveal the hard money lender at the last minute. Title needs to prepare the mortgage, the promissory note, and the other documents to sign and record. Dropping that on them days before closing creates avoidable delays and strained relationships.
Give title the lender’s name, the entity name, and the expected loan amount as soon as the contract is signed. Confirm the entity name matches everywhere. Name mismatches are one of the most common items that trip a closing.
How Sellers and Agents Verify Your Letter
Expect the document to be tested. CheckFile.ai notes that title companies increasingly build proof-of-funds verification into intake. Every Door Real Estate advises sellers to verify a letter by calling the issuer at a number they find independently, and it warns that screenshots are not proof of funds.
What gets a letter rejected:
- A stale date
- A name that differs from the buyer on the contract
- An amount below the offer price
- A vague letter with no contact details
- A template that looks pasted from a website
Altered bank statements are a known problem, which is why agents lean on callbacks. Make verification easy. A letter whose issuer picks up the phone beats a prettier letter nobody can reach.
Where the General Rule Bends
Several situations change the picture:
- Wholesalers and assigned contracts. Wholesalers often need a letter because they may not intend to close personally. The fake-proof-of-funds scam, where a buyer ties up a contract and cannot close, is why sellers scrutinize them.
- Own cash plus hard money. Many buyers combine both. You generally need cash in the deal, and lender guidelines vary widely.
- Multiple funding sources. Some investors present one offer showing cash, private money, and lines of credit, with a letter from each funder. It works when the funder contact details are verifiable.
- Paid or free letters. Some lenders issue free letters with little review, so sellers may be wary. Others charge a review fee. A letter backed by real underwriting carries more weight.
- Collateral still matters. Hard money is asset-based, but it is not an appraisal waiver. Collateral value is the main factor, so a lender can adjust the amount if the property or plan looks different from the pitch.
Which Proof Do You Need?
| Your situation | What to attach |
|---|---|
| Fully self-funded purchase | Your own statement in the buyer’s name |
| Hard money for most of the price | Lender letter plus your own funds for the down payment |
| Cash plus hard money | Both, with the offer labeled financed |
| Wholesaler without funds | Letter from your end buyer or a lender, and honest wording |
The rule of thumb: if any lender money is involved, say so. Attach the lender’s letter and your own funds, and let the seller judge the whole package.
Key Terms Defined
Proof of funds: A document showing money you hold now, usually a bank or brokerage statement in the buyer’s name.
Pre-approval letter: A lender’s statement that it will lend up to a stated amount if conditions are met.
Loan-to-cost: The loan amount as a share of total project cost, which is how hard money leverage is usually measured.
After-repair value: The estimated value of the property once renovations are finished.
Earnest money: A deposit that shows the buyer is serious and can be at risk if the buyer defaults.
Planning the Exit
Hard money is short-term. Terms on our network run 6 to 18 months, interest-only, with no prepayment penalty, and loan amounts go up to $5,000,000, with larger balances by exception. Those figures vary by lender, property, and experience. Many investors refinance out of hard money into long-term rental financing once the property is stabilized, and Lendmire brokers that path. Our complete DSCR loans guide explains how that long-term financing works. Hard money applies to non-owner-occupied residential property of 1 to 4 units, with ground-up construction up to 10 units.
Frequently Asked Questions
Does a hard money lender’s letter count as proof of funds?
It counts as proof of financing capacity, not proof that you hold cash. The letter is typically a pre-approval that says the lender will lend up to a stated amount if conditions are met. Sellers expecting cash want a statement from the buyer’s own account.
Can I submit a cash offer if I am using hard money?
Write it as financed. Cash means you have the cash to close. If you tick “cash” and the lender then funds the purchase, you risk losing your earnest money and damaging trust with the seller.
What must the letter say?
It should carry the lender’s name and contact details, the buyer or entity name, the amount, a date, and a signature. The name should match your contract exactly. The amount should cover what you are asking the lender to fund.
Do I need to tell the title company about the lender?
Yes, and early. Title must prepare the mortgage, promissory note, and related documents for signing and recording. Late disclosure causes problems close to closing.
Can a hard money lender fund my entire purchase?
No true 100% purchase program exists on our network. Bridge purchases without rehab go up to 80% of purchase price, and fix-and-flip tiers are based on project cost and capped at 75% of after-repair value. All terms vary by lender, property, and experience, and nothing here is a commitment to lend.
Next Steps
If you are buying, rehabbing or refinancing an investment property on a short timeline and want to see how the numbers work, Lendmire can help you compare hard money options based on the project, the exit plan, leverage, and your goals. Lendmire is a brokerage arranging investor loans across 41 markets, including Washington, D.C., and you can reach the team at 828-256-2183.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage focused on investor financing, arranging DSCR loans in 40 states plus Washington, D.C. — 41 markets total. Qualification is based on the property’s income rather than personal income documentation, subject to lender guidelines, making it a fit for LLC-held rentals and scaling portfolios. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
The exit plan matters as much as the purchase price on short-term financing – see the hard money loan overview.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. CheckFile.ai: fake proof-of-funds letters and fraud detection
2. Every Door Real Estate: cash offer scams
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Is a Hard Money Fix and Flip Loan Worth It for a Business Owner? · Can a 1099 Contractor Get a Hard Money Loan to Flip a House? · Can You Get an Interest-Only Hard Money Loan for a Fix and Flip?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.