Unlike conventional mortgages, hard money loans are primarily asset-based — meaning your credit score and income matter less than the deal itself. Here’s exactly what lenders look for in 2025.
The 5 Key Qualification Criteria
1. Property Value (Most Important)
Hard money lenders care most about the collateral — the property itself. They’ll lend up to 65–75% of the After Repair Value (ARV) or 80–90% of the purchase price + rehab costs (LTC). If the numbers work on the deal, most lenders can make it happen.
2. Credit Score
Most hard money lenders require a minimum 580–620 credit score. Some portfolio lenders will go below 580 with a larger down payment. Unlike conventional loans, a score of 640 vs 740 rarely affects your rate significantly — it’s more of a pass/fail threshold.
3. Down Payment / Equity
Expect to put 10–30% down depending on the lender and your experience level. First-time investors typically need 20–25% down. Experienced investors (10+ deals) may access 90% LTC programs from lenders like Kiavi.
4. Exit Strategy
Lenders want to know how you’ll repay the loan — whether that’s selling the property after rehab (fix and flip) or refinancing into a long-term DSCR loan (BRRRR). A clear, realistic exit strategy is essential for approval.
5. Experience (Helps But Not Required)
First-time investors can absolutely get hard money loans — you’ll just face slightly higher rates and lower LTV. As you build a track record, lenders compete aggressively for your business and terms improve significantly.
Documents You’ll Need
Most hard money lenders require: government-issued ID, purchase contract, property photos/inspection, scope of work with rehab budget, proof of funds for down payment, and an entity operating agreement (if using an LLC). The process is far lighter than conventional financing.