Example Hard Money Loan Terms for Multifamily and Commercial Property

Size: $500,000 and up
Term: Typically, 6 months to 3 years (extension options available)

Interest Rates: Typically,12%+

Origination Fee: Typically, 3.00% - 5.00%
‍Amortization: Interest only (deferred payments occasionally available)
‍Maximum LTV: Typically limited to 65% of as-is value

Advantages

• Loan amount determined by property value
• Fast closing process
• Limited borrower qualifications required

Disadvantages

• The highest rates
• The highest closing costs
• Short period with balloon payment
• Risk of losing property for a small loan amount
• Full recourse