Hard Money Brokers — The Quick Read: A hard money broker does not fund your loan. The broker packages your deal and places it with a private capital source that will fund it. This matters a lot. It changes who decides yes or no on your file. It is why brokers add real value on deals that do not fit neatly into one lender’s box. Across the wholesale network Lendmire works with, hard money leverage typically runs up to 90% LTV. Rehab budgets get financed separately, often up to 100% of the rehab scope. Underwriting is asset-based. It is built around the property’s value, the exit plan, and the equity cushion. It does not look at a borrower’s pay stubs.
Key Takeaways
What this loan actually costs to carry in your market.
Hard money is priced by time, not by coverage. Enter the deal and see the cash required at closing, the carry while you hold it, and what is left at the exit.
Top leverage tiers are reserved for experienced investors with a documented track record; 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.
Deal estimate
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. Leverage tops out near 90% of purchase for experienced investors, with rehab funding up to 100% of the documented budget; actual terms vary by lender, borrower experience, property, and exit. Hard money is not priced off the conforming mortgage curve, so this rate is a market-typical assumption rather than a published index.
- A hard money broker connects your deal to private capital. A direct lender funds the deal from its own balance sheet.
- Underwriting runs on the property, not on personal income. Value, equity cushion, and exit strategy carry the file.
- Rehab funds release in stages, tied to completed work. They are not handed over at closing in one lump sum.
- Most hard money files eventually refinance into long-term rental financing once the property is leased and stabilized.
- Licensing rules for brokers and lenders vary a lot by state, even for business-purpose loans.
What a Hard Money Broker Actually Does
A hard money broker takes your deal. That means the property, the numbers, and the exit plan. The broker shops this deal to private funds, family offices, or individual investors. These are the people who actually write the check. The broker does not approve anything. That decision sits with whoever controls the capital.
This is the core difference between a broker and a direct lender. A direct lender reviews and funds deals from its own balance sheet. A direct lender can approve a file the same day it lands on a desk, as long as the deal fits their box. There is a real trade-off here. A direct lender moves fast on a clean, conventional deal. But a direct lender often has a narrow appetite. A broker’s value shows up when a deal doesn’t fit that box. Maybe it is an odd property type. Maybe the borrower has multiple entities. Maybe it is a market that a given lender’s primary capital source does not favor. The broker’s job is matching capital to deals, not manufacturing capital.
There is a third category worth knowing: the wholesale lender. A wholesale lender underwrites and funds through institutional lines, not a single private fund. A wholesale lender typically serves the long-term rental refinance, not the short-term bridge loan. Here is how the three stack up:
| Factor | Hard Money Broker | Direct Hard Money Lender | Wholesale Rental Lender |
|---|---|---|---|
| Capital source | Network of private funds/investors | Own balance sheet | Institutional lines |
| Who decides | Capital source, broker packages file | Same entity decides and funds | Lender decides, broker packages file |
| Best fit | Unusual property or complex file | Straightforward, in-the-box deal | Stabilized rental refinance |
| Typical use | Bridge, fix-and-flip, construction | Bridge, fix-and-flip, construction | Long-term rental hold |
One wrinkle worth flagging: these labels are not always separate boxes. Some brokers have one or two steady private-capital relationships. These brokers effectively underwrite the file themselves and issue documents in their own name. On paper, this makes them look like a direct lender, even though a private investor sits behind them. The label on a website does not always tell you who actually controls the underwriting decision on your file.
How Underwriting Actually Treats a Hard Money File — Step by Step
Every hard money file gets valued twice before a lender commits to a number. The first value is as-is. This means what the property is worth today, in its current condition. The second value is after-repair value, or ARV. This means what the property is projected to be worth once planned renovation is complete. That ARV estimate usually comes from a broker price opinion or an appraisal. Both are built on comparable renovated properties nearby. The accuracy of that ARV estimate matters as much as any leverage percentage. An aggressive ARV built on thin comps is one of the most common reasons a file gets re-scoped mid-underwriting.
From there, three ratios decide how much gets lent:
- LTV — the loan as a percentage of the property’s current, as-is value.
- LTC — the loan as a percentage of total project cost, meaning purchase price plus rehab budget. This checks how much of the investor’s own equity is actually in the deal.
- LTARV — the loan measured against the projected post-renovation value. This number typically drives how much a flip loan will lend.
Across the wholesale network Lendmire places files through, maximum leverage on purchase, fix-and-flip, cash-out, and commercial hard money generally tops out around 90% LTV. The highest tier is reserved for experienced investors with a track record of completed projects. Rehab gets financed separately from purchase leverage. Some programs will fund up to 100% of the rehab budget on top of the purchase-side loan. That is a rehab-cost figure, not a purchase LTV number. This distinction is worth being precise about. There is no genuine 100% purchase-LTV hard money program in the market. What exists is high leverage on the purchase side, plus a fully financed rehab scope layered on top.
Rehab dollars do not show up at closing in one check. They release in stages, called a draw schedule. Each release ties to inspected, completed work, not a single disbursement. How interest accrues on undrawn funds differs by capital source. Some capital sources accrue interest on the full approved balance from day one. This is sometimes called “Dutch” interest. Other capital sources accrue interest only on funds actually disbursed. Which convention applies to your file is a term-sheet detail, not an assumption. Confirm it before you sign.
Once the property is renovated, leased, and stabilized, the file pivots. At this point, a bridge or rehab loan typically hands off to a long-term refinance. This is usually a DSCR loan. A DSCR loan qualifies primarily on the property’s rental income covering the payment, not on the borrower’s personal income, subject to lender guidelines. Across most DSCR programs in the wholesale network, purchase and rate-and-term refinance leverage tops out around 80% LTV on the strongest files. Cash-out is capped lower, generally no higher than 75% LTV. A 1.00 coverage ratio is where select programs start. This is a floor on specific products, never a universal standard. Stronger coverage tends to unlock better leverage and terms. Investors weighing that next step can walk through the mechanics in Lendmire’s complete DSCR loans guide. Investors can also look at how a hard money loan can convert into a cash-out refinance once seasoning requirements are met.
Key Terms Defined
After-repair value (ARV): the projected market value of a property once planned renovations are complete. This is the number that drives how much a flip loan will actually lend.
Loan-to-cost (LTC): the loan amount measured against total project cost, meaning purchase price plus rehab budget. This is a check on how much equity the investor has committed.
Draw schedule: the staged release of rehab dollars. Each release ties to completed and inspected work, rather than one lump-sum disbursement at closing.
Seasoning: how long a lender wants an investor to hold a property before refinancing it. This especially applies before pulling cash out.
DSCR (debt-service coverage ratio): a measure of whether a property’s rent covers its full monthly housing payment. This is the metric that governs long-term rental refinancing once a flip becomes a hold.
Licensing and the Business-Purpose Line
Hard money and DSCR loans made to an LLC for a business purpose generally sit outside the consumer-protection rules that govern an owner-occupied mortgage. This includes the ability-to-repay requirement the Consumer Financial Protection Bureau applies to consumer-purpose transactions. This is the wall the entire industry is built on. These are business-purpose loans to investors, not owner-occupants. So they get reviewed differently than a standard consumer mortgage. This is not a loophole. It is a different regulatory lane. This is why fix-and-flip and rental financing exist as their own category in the first place.
State licensing still applies on top of that, and the rules are not consistent. Anyone can check a broker’s or lender’s license status directly through NMLS Consumer Access. This is the public registry that tracks non-depository licensing across participating states. Some states apply licensing to business-purpose lending regardless of the exemption. California requires most non-bank lenders, hard money included, to hold a state financing license. Arizona, Nevada, North Dakota, and South Dakota apply their own registration rules to categories of investor-property lending. “Business purpose = exempt everywhere” is a genuine misconception. Verify the license. Do not assume the exemption travels state to state.
The Structures and Variations You’ll Run Into
Hard money is not one product. It covers residential investment property, multifamily, commercial, industrial, land, and ground-up construction. These are collateral types that a conventional or agency lender typically will not touch mid-project. Loan sizes across the network generally run from roughly $100,000 up to $60,000,000. Terms vary by lender and by file, rather than following a fixed menu.
Term structures cluster around short bridge loans of roughly 6 to 12 months. These fit straightforward acquisition-and-exit deals. Select programs also offer 2-, 3-, and 5-year options. These fit longer holds or heavier construction timelines. Interest-only structures show up regularly. This keeps carrying costs lower while a project is mid-renovation and not yet producing rent.
Underwriting stays asset-based throughout. It centers on the property’s value, the equity cushion, and the exit plan. Credit minimums vary by program. Some programs carry no fixed floor at all. But that never means approval is automatic. Every file still gets reviewed on its own merits. Borrowers typically hold title through an LLC or similar entity, for liability and tax reasons. That structure is standard in this corner of lending. Eligibility for a given program still runs subject to lender program eligibility.
Where the General Rule Breaks — Edge Cases
The asset-based, business-purpose framework has real exceptions. They are worth knowing before you assume a deal fits the mold.
Owner-occupied collateral changes the analysis entirely. Even when the paperwork says business purpose, a loan secured by a borrower’s primary residence tends to pull mortgage licensing and consumer-protection rules back into play in most states. This is a direct reason many hard money lenders simply will not touch owner-occupied collateral. The programs described here are built around non-owner-occupied investment property.
Volume in this space also swings hard and fast. Bridge and DSCR origination activity has moved sharply in both directions over recent stretches. This means a broker’s active lender roster and appetite today can look very different than it did a year ago. Ask a broker what their current network actually favors. Do not assume last year’s terms still apply.
Not every property type clears the door either. Manufactured homes, whether single- or double-wide, along with log homes and barndominiums, are not offered under the DSCR programs in Lendmire’s wholesale network. That is a flat “not offered,” not a “harder to finance” situation. It is worth knowing before you shop a deal that includes one of those property types.
Choosing a Broker: What the Investor Decision Looks Like
The real trade-off is speed and control versus reach. A direct lender who says yes can move you forward without a middleman. But this only works if your deal fits their specific box. A broker’s network exists for the deals that do not fit that box. This includes unusual property types, complex entity structures, or a market a given capital source is not actively lending into that month.
Compensation typically comes through points paid at closing. This is standard across the industry. It is not, by itself, a reason to avoid working with a broker. But it is worth asking directly how a given broker gets paid. Ask whether that shapes which lender they present your file to first. A broker with one primary relationship is not shopping your deal the way a broker with a genuinely diverse capital network is.
A short checklist before signing on with any broker:
- Confirm license status through NMLS Consumer Access rather than taking a claim at face value.
- Ask how many active capital sources they place files with, not just how many they’ve worked with historically.
- Get the draw-schedule terms in writing before closing — inspection turnaround and disbursement timing affect your carrying costs directly.
- Ask plainly whether they act as broker, underwrite in-house as a quasi-direct lender, or both, on your specific file.
- Confirm the seasoning requirement and exit-financing expectations up front, especially if a DSCR refinance is the intended endgame.
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
Frequently Asked Questions
How do you qualify for a DSCR refinance after exiting a hard money loan?
Qualification runs on the stabilized property, not on personal income. The lender looks at the rent the property produces against its full monthly housing obligation. The lender also checks the as-completed value, supported by an appraisal, the borrower’s credit profile, and whether the seasoning requirement has been met. A 1.00 coverage ratio is the floor on select programs only, not a universal standard. Stronger coverage generally supports better leverage. Cash-out proceeds are capped lower than purchase or rate-and-term leverage. All of this remains subject to lender guidelines, credit approval, and full underwriting.
What are the requirements for working with a hard money broker on a fix-and-flip file?
Expect to document the property, the purchase contract, a line-item rehab budget, your exit plan, and any prior completed projects. Experience tends to drive the top leverage tiers. Title is usually held through an LLC or similar entity. The loan must be business-purpose and secured by non-owner-occupied collateral. Confirm the draw schedule and inspection process in writing before closing. Program eligibility varies by capital source.
Is it more expensive to use a hard money broker instead of going direct?
Not necessarily. A broker is typically paid through points at closing, much like a direct lender’s own fees. The difference is that a broker shops multiple capital sources instead of presenting only one option. On a deal that does not fit a single lender’s box, a broker’s access to a wider network can offset any added cost through better-fitting terms.
Do I need a hard money broker, or can I go straight to a lender?
It depends on how well your deal fits a specific lender’s appetite. A clean, conventional flip or bridge deal may move fine straight to a direct lender. A deal with an unusual property type, a complex entity structure, or timing that does not suit one lender’s current capital position usually benefits from a broker’s wider matching ability.
Can a hard money broker also act as the lender?
Sometimes. Some brokers have steady private-capital relationships. These brokers effectively underwrite the file and issue loan documents under their own name. This makes them function as a direct lender, even though outside capital sits behind them. Ask directly who controls the underwriting decision on your file. Do not assume the label on a website tells the whole story.
What happens after the rehab is done and the property is rented?
Most hard money and bridge loans are designed to be temporary. Once a property is leased and stabilized, the standard move is refinancing into long-term financing. This is typically a DSCR loan, reviewed on the property’s rental income rather than personal income, subject to lender guidelines and seasoning requirements.
Does a hard money broker need a state license?
It varies by state, even for business-purpose loans. Some states apply licensing regardless of purpose. California, for instance, generally requires most non-bank lenders, including business-purpose lenders, to hold a state financing license. Verify license status through NMLS Consumer Access before working with any broker. This is the safer approach, rather than assuming a business-purpose exemption applies everywhere.
Many investors treat hard money as the acquisition tool and plan the exit up front. See refinancing out of a hard money loan with a DSCR loan.
Program availability, loan terms, and eligibility are subject to lender guidelines, credit approval, property review, and full underwriting. This article is educational. It is not a loan offer or a commitment to lend.
See how DSCR loans work as the long-term exit.
About Lendmire
Lendmire operates as a non-QM DSCR mortgage broker, NMLS# 2371349. Lendmire arranges DSCR investor loans through a wholesale network spanning 39 states plus Washington, D.C. — 40 markets in total. Lendmire also structures the pipeline that carries an investor from a rehab or bridge stage into a stabilized long-term rental refinance. Lendmire does not lend its own funds. Files are placed with wholesale lenders whose guidelines govern approval. For background on how the short-term side of that pipeline works, Lendmire’s guides on what hard money lending is and what hard money means cover the fundamentals before the broker conversation starts. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Tax treatment can depend on how loan funds are used and how the property is held. Investors should keep clear records. Investors should speak with a qualified tax professional before relying on any deduction.
No loan approval is guaranteed by anything here. Every scenario described here is general information. It is subject to lender approval and to the borrower’s, property’s, and program’s specific guidelines. This is not a commitment to lend, and not financial, legal, or tax advice.
Investment Property Review
See how the DSCR math works for your investment property.
Lendmire can review rent, leverage, property type, and DSCR fit before you get too far into the deal.
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. Consumer Financial Protection Bureau — Ability-to-Repay and Qualified Mortgage Standards
3. 2025
4. 2026
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
Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.
