The Quick Read: A hard money loan typically runs 6 to 18 months on the programs Lendmire’s network places, with interest-only payments and the full balance due at maturity, so the term has to cover your rehab, your lease-up, and the waiting period before a long-term refinance becomes available. Extensions exist only if the loan documents grant them, and they cost money. Terms vary by lender, property, and experience, and nothing here is a commitment to lend.
- The term is short by design. You pay interest only, then repay everything at the maturity date.
- No multi-year option exists on the current program, so a longer runway means refinancing into long-term rental financing.
- An extension is a contract right or a lender favor, depending on your note. Read it before you sign.
- Plan backward from maturity. A rehab that finishes early does not move your refinance date.
- Seasoning (the waiting period a lender wants after you buy) usually counts from the recorded deed, not from the day the work ends.
What Does “Term” Actually Mean?
The term is the length of time between the loan’s start and its maturity date. At maturity, the whole principal balance is due in one lump sum. That lump sum is called a balloon payment. Until then, you make interest-only payments, which means none of your monthly payment reduces the balance.
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.
That structure is the reason hard money is a bridge, not a place to live. Compare it with a long-term rental loan, which spreads repayment over decades and is underwritten on the rent the property earns. Hard money is underwritten on the property, the plan, and the exit. The loan assumes you will sell or refinance before the clock runs out.
Two more terms get mixed up often. An extension keeps the original loan alive past its maturity date, usually for a fee. A modification rewrites other terms of the loan, such as the payment structure or the balance. The two are different requests with different outcomes, and the rest of this article is about the first one.
What Sets the Length of Your Term?
The exact figure within that range depends on the lender, the property, and your track record. Market surveys describe a wider spread, quoting hard money terms of roughly 6 to 24 months according to Note Servicing Center. The network figure is the one that applies to files Lendmire places.
| Factor | Effect on your term |
|---|---|
| Scope of rehab | Heavier work usually needs a longer term |
| Your experience | More completed projects can mean more flexibility |
| Exit plan | A sale and a refinance need different runways |
| Lender’s appetite | Each lender sets its own limits |
| Property condition | Larger problems stretch the timeline |
Notice what is not on the list: your wishes. A longer term sounds better, but lenders price the added risk of a longer wait, and the program tops out at 18 months. The goal is a term that matches your real calendar, not your best-case calendar.
How Term Differs by Loan Purpose
Each purpose carries a different timeline pressure. A flip needs time to renovate and sell. A bridge purchase needs time to stabilize. A refinance on a finished property needs the least time, but the leverage is lower.
| Purpose | Network leverage (varies by lender and experience) | Timeline pressure |
|---|---|---|
| Fix-and-flip | Up to 75% of after-repair value, tiered by project cost | Rehab plus sale |
| Bridge, no rehab | Up to 80% of purchase price | Lease-up plus takeout |
| Cash-out or rate/term refinance | Up to 65% of value | Moderate |
| Ground-up construction | Up to 90% of cost at 3+ completed projects | Longest build |
Fix-and-flip leverage is measured against project cost and capped against after-repair value, and the strongest tiers go to experienced investors.
How to Choose a Term: Pad Backward From Maturity
Pick the term by working backward from the date you want to be out. Start with the exit and stack each stage in order. Then add a buffer, because every stage runs long more often than short.
1. Exit event. This is either a sale or a refinance into long-term financing.
2. Underwriting and appraisal window. A refinance lender must order the appraisal, review the file, and approve it. Leave room for all of it.
3. Seasoning. If your refinance lender requires a waiting period, it generally runs from the recorded deed. Finishing the rehab or signing a lease does not start the clock. For cash-out refinances, about 6 months of seasoning is the common expectation across the network.
4. Lease-up. A rental takeout needs a tenant and a lease so the rent can be tested.
5. Rehab. Add contractor delays, permit waits, and inspection scheduling.
The most common structural mistake in a hard-money-to-DSCR exit is a term shorter than rehab, lease-up, seasoning, appraisal, and underwriting combined. If seasoning clears after maturity, you are buying an extension whether you planned to or not. The mistake is easy to avoid on paper and expensive to discover in month eight.
How Extensions Work
An extension is a contractual option to push maturity past the original date for a fee. RentalRealEstate.com’s bridge loan guide describes extensions as typically running 3 to 6 months. That is a market description, and the network’s own terms are the 6 to 18 months noted above. Extension availability on a specific file is set by the lender and the loan documents.
Three mechanics matter most.
The rules live in your original documents. The note and loan agreement set the initial term, any extension options, and the fee for each one. Note Servicing Center points out that extension terms are written into the original loan documents and negotiated up front. Ask about extension policy before you sign, not when maturity is close.
Fees are quoted in different ways. Published sources describe extension fees in different units. Some quote a charge per extension. Others quote a charge per 30-day period. Those are not the same cost over a six-month stretch. Read the term sheet and convert every quote to a total cost for the full extension you may need.
Extensions signal risk. The same servicing-industry source notes that extensions signal execution risk to future lenders. A refinance lender looking at a file with two extensions will ask why the project ran long.
Most hard money lenders treat an extension as discretionary unless the note makes it a contractual right. The loan generally has to be performing, meaning payments are current and the project is moving. A borrower who is behind on payments and behind on the rehab is asking for a favor, not exercising a right.
When to Ask, and What to Bring
Ask early. A request made while the exit is still plausible reads as planning. A request made at the last minute reads as distress.
A practical countdown looks like this:
- About three months before maturity: Compare your remaining work and seasoning against the maturity date. If the numbers do not fit, start the conversation now.
- About two months before: Submit the extension request, along with proof the exit is in motion.
- About one month before: Confirm the extension is documented in writing and the fee is accounted for in your payoff math.
Lenders generally want to see these items with a request:
- Proof that payments are current
- Rehab progress, such as completed draws or inspection reports
- Evidence of the exit, such as a listing agreement or a refinance application
- A clear explanation of what caused the delay
Remember that interest keeps accruing after you pay the extension fee. The written payoff statement should show principal, accrued interest, and any exit or extension fee, so ask for it before you decide.
Extend, Refinance, Sell, or Pay Off?
When maturity arrives with the exit unfinished, you have four main paths. Each solves a different problem.
| Path | Best when | Watch for |
|---|---|---|
| Extend | Exit is close and the fee is modest | Short extensions, stacked fees |
| Refinance out | Property is rented and seasoned | Seasoning, appraisal, coverage |
| Sell | Value supports a clean sale | Market timing, carry costs |
| Pay off with cash | You have liquidity | Capital tied up |
Compare the extension fee plus added carry against what waiting gains you. If a longer wait brings more cash out at the refinance, an extension can pay for itself. If waiting adds cost without a better outcome, a payoff-only refinance or a sale may serve you better. Stacked extension fees can approach the cost of simply refinancing into a longer-term loan.
Maturity can also arrive before seasoning ends. That is a maturity collision. Your choices are an extension, a refinance that only pays off the bridge, bringing cash to the table, or a sale. None of them is free, which is why planning backward matters.
The DSCR Takeout: What the Exit Lender Tests
Many investors refinance out of hard money into long-term DSCR financing once the property is stabilized, and Lendmire brokers that path. A DSCR loan is a normal long-term investor loan whose proceeds pay off the bridge lien. DSCR stands for debt service coverage ratio. It compares the property’s monthly rent to its monthly PITIA, which is principal, interest, taxes, insurance, and any association dues.
DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. The loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines.
Here is how the network generally treats a takeout:
- Seasoning: For a cash-out refinance, about 6 months is the common expectation.
- Leverage: Cash-out refinances on standard rentals top out around 75% LTV across most of the network. LTV means loan-to-value, the loan balance divided by the property’s appraised value.
- Coverage: A 1.00 ratio is where many select programs start. A separate select-lender path goes below 1.00, with leverage and terms adjusted. Stronger ratios open better leverage and pricing.
- Credit: A 620 floor exists in parts of the network. Most programs want about 660, and 700 or higher opens the strongest tiers.
- Structure: The spine is the 30-year fixed. Extended terms and interest-only periods are available through select lenders in the network.
Clearing 1.00 does not mean the property produces positive cash flow. DSCR counts rent against PITIA only. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation. Budget for them separately.
Hard money lenders may not take you out themselves. Some pause or drop their own long-term refinance programs, so line up the takeout independently.
For the full picture of how these programs work, see the complete DSCR loans guide.
A Worked Timeline: Where an Extension Gets Triggered
Take a hypothetical 12-month note on a fixer that the investor plans to rent and refinance. The inputs below are modeled assumptions, not market data.
- Month 0: The deed records. The seasoning clock starts here.
- Months 1 to 5: Rehab runs a little long, ending in month 5 instead of month 4.
- Month 6: The unit is leased. Seasoning of about 6 months has now passed, but the lender still needs a lease and rent evidence for coverage.
- Months 7 to 9: The investor orders the appraisal and submits the file. The appraisal and underwriting window is where small delays pile up.
- Month 12: The note matures.
In this version, there is room to spare. Now change one thing: the rehab runs to month 8 because of a permit hold. The lease starts in month 9. The refinance file does not reach underwriting until month 10. Maturity is two months away with no buffer for a hiccup. The investor now needs an extension, a fee, and more interest carry, not because the project failed but because the term was sized to the best case.
Compare the two outcomes. In the first, the term had slack. In the second, the term had none. That slack is what an extra few months of term buys you, and it is almost always cheaper to build in at the start than to buy later.
The same logic applies with ratios. If the extension fee and added carry shrink your cash-out proceeds and also leave rent barely covering the new loan, the DSCR may land near the floor of what select programs accept. Waiting could make the deal tighter, not better.
What Happens If You Miss Maturity?
Missing maturity without an extension or payoff puts the loan in default. The general sequence is a notice, possible default interest and fees, and then the lender’s remedies under the note, which can include foreclosure. The details depend on your documents and on state law, so treat this as general information, not a prediction for your file. The lender can foreclose if the loan cannot be extended or repaid.
Don’t count on a lender’s goodwill. Extensions are often short, and a short extension may not be enough to finish the job. Raising the issue early is the best protection you have.
Four Edge Cases Where the Usual Rules Break
Ineligible takeout collateral. The network does not offer DSCR loans on manufactured homes (single- and double-wide), log homes, or barndominiums. If your property is one of these, you have no DSCR takeout, so plan the exit before you take the bridge.
Extension caps. Some bridge lenders cap total extensions as a share of the original term. If your lender does, you cannot extend your way out of a bad plan.
Hard money as seasoning. Agency delayed-financing rules offer a loose template for what lenders worry about, but they do not govern DSCR files. Hard money is generally not treated as cash because the subject property secured it. DSCR seasoning is set by each lender.
Short-term rental exits. An STR takeout has its own leverage tiers and requires hosting history. Lendmire’s piece Exiting a Hard Money Loan on a Short-Term Rental: The STR Lane’s Own Rules covers those rules. Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income.
Questions to Ask Before You Sign
Negotiate term and extension rights at origination, when you have the most leverage. Put these questions to every lender:
- Is an extension a contractual right or discretionary?
- How is the extension fee quoted, and what does it add up to for the longest extension?
- Is there a cap on total extensions?
- Does interest continue to accrue, and at what payment?
- Are there conditions, such as a performing loan or rehab progress?
- Is there a prepayment penalty if I exit early? (On the network’s current program, there is none.)
Key Terms Defined
Term: The length of time from loan start to the maturity date.
Maturity date: The date the full remaining balance comes due.
Balloon payment: The lump-sum balance owed at maturity after interest-only payments.
Interest-only: A payment that covers interest and does not reduce the balance.
Extension: A contractual option to push maturity past the original date, usually for a fee.
Modification: A rewrite of other loan terms, separate from an extension.
Seasoning: The waiting period a lender wants after you buy before it will refinance.
DSCR: Debt service coverage ratio, which compares rent to the monthly PITIA.
PITIA: Principal, interest, taxes, insurance, and any association dues.
Next Step
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.
Frequently Asked Questions
How long is a typical hard money loan?
On the network’s current program, terms run 6 to 18 months, interest-only, with no prepayment penalty. The exact term varies by lender, property, and experience. Market surveys report a wider range, but there are no multi-year options on this program.
Are extensions automatic?
No. They depend on your contract and the lender’s discretion, and the loan generally has to be performing. Some notes grant an extension as a right, and others leave it to the lender. Check the documents before you sign.
Do extension fees get hidden in the fine print?
They sit in the original loan documents, so they are visible if you read them. The trap is the way fees are quoted. A per-period charge and a per-extension charge can produce very different totals, so convert every quote to a total cost.
Does finishing my rehab start the refinance clock?
No. Seasoning generally runs from the recorded deed, not from rehab completion or a signed lease. If your lender requires seasoning, check the date against your maturity date before you commit to a term.
What if my property can’t be refinanced into a DSCR loan?
Then you need a different exit, such as a sale or a payoff with cash. Manufactured homes, log homes, and barndominiums are not offered in the network’s DSCR programs. Plan the exit before you take the bridge.
About Lendmire
Lendmire — NMLS# 2371349 — is a DSCR and non-QM mortgage brokerage with investor loan programs in 41 markets, including Washington, D.C. DSCR eligibility is commonly reviewed by the lender around property-level rent rather than personal income documentation, subject to lender guidelines, and the brokerage helps arrange financing for LLC-owned portfolios beyond conventional financed-property limits. Recognized by Scotsman Guide as a Top Mortgage Workplace in 2025 and 2026.
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References
1. noteservicingcenter.com: Hard Money Loan Fees Dispelling the Hidden Cost Myth for Investors
2. RentalRealEstate.com: Bridge Loans
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can an Investor Get a Hard Money Loan Without Verifying Income? · Should a Rental Buyer Choose Hard Money or a Non-QM Loan? · Can a Short-Term Rental DSCR Loan Pay Off Hard Money Before 12 Months?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.