How to Get a Hard Money Loan in 2025: Step-by-Step Guide

Getting a hard money loan is far simpler than a conventional mortgage — but there are still specific steps to follow to get approved quickly and get the best terms. Here’s the exact process from start to close.

Step 1: Know What You Need Before You Apply

Before contacting any lender, have this information ready:

Property address and purchase price (or current value if refinancing)
Estimated ARV (After Repair Value) — this is the most important number
Rehab budget — itemized scope of work if possible
Your exit strategy — flip (sell) or refinance (rent and hold)
Your experience level — number of deals completed in the past 24 months

Step 2: Compare Lenders

Don’t go with the first lender you find. Key factors to compare:

Rate — ranges from 8.75% to 14%+ depending on your profile and state
Points/origination fee — typically 1–4 points (1 point = 1% of loan amount)
LTV/ARV limits — most lenders cap at 70–75% ARV or 80–90% of purchase price
Prepayment penalty — important if you plan to sell quickly
Close time — ranges from 7 to 21+ days

Step 3: Submit Your Application

Most hard money lenders require:

Completed loan application (name, address, entity if using LLC)
Property purchase contract or address
Proof of funds for down payment (bank statement)
2-3 months bank statements (some lenders)
Photo ID
For experienced investors: track record / deal history

Step 4: Property Appraisal / BPO

The lender will order a Broker Price Opinion (BPO) or appraisal to confirm the ARV. This typically costs $150–$500 and takes 3–7 days. You can speed this up by providing your own comparable sales (comps) when you apply.

Step 5: Underwriting and Term Sheet

Once the appraisal comes back, the lender issues a term sheet outlining rate, points, loan amount, and conditions. Review carefully — especially the extension fees and default rate if you run over schedule.

Step 6: Close and Fund

Hard money loans close at a title company or attorney’s office, just like a conventional loan. Bring your ID, proof of insurance, and funds for closing costs. Most lenders fund the same day or within 24 hours of closing.

Timeline Summary

Step	Timeline
Application submitted	Day 1
Conditional approval	Day 1–2
Appraisal ordered	Day 2–3
Appraisal received	Day 5–7
Term sheet issued	Day 7–8
Closing scheduled	Day 9–14

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