BORROWER FAQ

A hard money loan is a short-term real estate loan secured by the property itself rather than by the borrower's tax returns and pay stubs. The lender underwrites the asset, the equity and the exit, which is why it can close in days instead of months. Loan Goat writes them for purchases, refinances, fix and flips, ground-up construction and bridge situations where a bank is too slow or says no. Terms and pricing depend on the property and the plan, so the first step is a quote.

Read the hard money loans guide Also answered under Loan Programs

Most hard money loans are interest-only with a balloon payment at maturity: you pay interest during the term and repay the principal when you sell, refinance or complete the project. On rehab and construction loans part of the money is held back and released in draws as work is completed. At Loan Goat the process is four steps: complete your application, submit required documentation, sign your Letter of Intent, and we process and close your loan in 5-7 days. The exit is agreed before funding, never after.

How borrowing works

In practice the two words describe the same loan: real estate financing funded by private capital instead of a bank and underwritten on the asset. "Private money" tends to describe where the funds come from and "hard money" the collateral-first underwriting, and lenders use both. Loan Goat is a private and hard money lender; what matters on each program is the terms, not the label.

See the nine programs

The use of the funds decides it. A business purpose loan finances an investment property or a business need; a consumer purpose loan finances a home you will live in or a personal or household expense. Consumer loans carry federal and state consumer protections and licensing rules, so they are documented and timed differently. Loan Goat's VA programs are consumer loans for veterans' primary residences; the bridge, fix and flip, construction, rental and commercial programs are written for investors. Tell us how the money will be used and we route it to the right program.

Owner occupied loans

It is a good idea when speed, leverage or flexibility is worth more than the lowest possible rate: a property you would lose to a cash buyer, a rehab a bank will not fund, or a file that does not fit conventional guidelines. The downside is cost: hard money is priced above bank debt and the term is short, so you need a real exit. The honest test is whether the deal still makes money after the cost of capital and whether you can sell, refinance or complete on time. If it does, the loan is a tool; if it does not, we will say so.

Read the pricing guide

The 70% rule is an investor's rule of thumb, not a lender's requirement: pay no more than 70% of the after-repair value (ARV) minus the renovation cost, so the margin covers financing, holding costs and profit. It is a screening tool for flips; lenders size the loan against the purchase price, the rehab budget and the ARV. Loan Goat's fix and flip program lends up to 85% of the purchase, 100% of the rehab and 75% of ARV, so a deal that passes the 70% rule usually leaves room for the down payment and reserves.

Fix and flip loans Also answered under Bridge Loans

No. A hard money loan is still financing, so a contract that requires cash cannot be satisfied by it. What it does is let you offer like a cash buyer: a fast close, no bank contingency in practice, and a lender who underwrites the property rather than your file. Loan Goat's hard money bridge can close in as quickly as 3 days, which is why sellers often accept it against cash offers.

Competing with cash offers

Yes, but credit is one input, not the decision. Loan Goat's investor programs publish their floors: 650 on the bridge loan, 620 on fix and flip and 600 on ground-up construction. Above the floor the property, the equity and the exit carry the underwriting, so a modest score with a strong deal still gets a conversation.

Bridge loan requirements

A hard money loan has three cost layers: the interest rate, the origination points and the third-party closing costs (escrow, title, appraisal where one is required). Loan Goat publishes rates on its programs, for example 9.00% to 13.00% on the bridge loan and 9.99% to 12.00% on fix and flip, for qualified borrowers; points and fees are quoted per deal on the Letter of Intent. Rates and pricing are subject to change without notice and are not a commitment to lend.

Read the pricing guide Also answered under Commercial Loans

Rates at Loan Goat run from 9.00% to 13.00% on the bridge loan and 9.99% to 12.00% on fix and flip, from 10.50% on the owner occupied bridge, from 6.50% on the Non-QM rental loan and from 7.90% on commercial, and construction is priced per project. Where a specific loan prices depends on leverage, credit, experience, property type and the exit. Rates are subject to change and are not a commitment to lend; ask for a quote on your deal.

Rates by program Also answered under Pricing Guide

Closing costs fall into four groups: the lender's origination and underwriting or document fees, escrow, title insurance, and the appraisal or valuation when one is required. The property and the loan size drive most of them, and several are pass-through amounts charged by third parties rather than by the lender. Loan Goat quotes the full figure on the Letter of Intent so there is no surprise at signing.

What goes into the cost

Several Loan Goat programs carry no prepayment penalty at all: the bridge loan, fix and flip, ground-up construction, the rental DSCR loan, the small and large balance bridge loans and the interest-only bridge all say so on their terms. On those programs you can sell or refinance early without a penalty. Any program that does carry a minimum interest period is disclosed on the Letter of Intent before you sign.

Bridge loan terms

An interest guarantee is a minimum amount of interest the lender earns even if the loan is repaid early; a prepayment penalty is a fee for paying off before a set date. Both protect the lender's yield on a short loan and both are written into the note, so they are known before closing. Where a Loan Goat program states no prepayment penalty, neither applies; for anything else the exact calculation is quoted on your Letter of Intent.

Lending definitions

Dutch interest means paying interest on the full loan amount from day one, including the rehab or construction funds that have not been released yet. Loan Goat's fix and flip and ground-up construction loans are non-Dutch: interest is calculated on the drawing balance, so you pay only for the money you have actually received. On a project with a large holdback that difference is real money every month.

Construction loans Also answered under Construction Loans

An interest reserve is a portion of the loan set aside at closing to cover the monthly interest payments, so the project does not carry them out of pocket while there is no rent or sale yet. It is common on rehab and construction loans. Loan Goat's fix and flip and ground-up construction programs offer an interest reserve; whether it makes sense for your deal depends on the timeline and your liquidity.

Fix and flip loans Also answered under Construction Loans

You qualify on the property, the equity or down payment, a credible exit and a credit profile above the program floor, not on tax returns. Experience matters less than people expect: the bridge loan requires no borrower experience, first time flippers are allowed on fix and flip, first time investors are OK on the rental DSCR loan, and ground-up construction asks for 2 previous ground-up projects. Send the address, the numbers and the plan and we will tell you the same day whether it fits.

How to borrow Also answered under Borrow

Less hard than at a bank, by design: Loan Goat's promise is less requirements, more closings, and most programs need minimal documentation. Approval turns on the deal itself, so a clean property with equity and a real exit moves quickly through the four steps: application, documentation, Letter of Intent, and closing in 5-7 days. What slows a file is missing paperwork or a plan that does not add up, not the lender.

Apply now Also answered under Borrow

For an investment property in California you need a non-owner occupied property that fits the program (SFR, condo or townhome, 2-4 units, multifamily, mixed use, retail, office, industrial or land depending on the loan), equity or a down payment, a credit score above the program floor and an exit. Loans on a home you occupy are consumer loans with different rules and timelines. Loan Goat Inc. is licensed with NMLS (Company NMLS 1416824, Branch NMLS 2554618); licence details are on the disclosures page.

Lending in California Also answered under Owner Occupied Loans

The down payment is the gap between the price and what the program lends. Loan Goat publishes its maximum leverage: up to 75% LTV on residential bridge and 70% on commercial, up to 85% of the purchase and 100% of the rehab on fix and flip, up to 80% LTC on ground-up construction and up to 80% LTV on the rental DSCR loan, so the minimum cash in is the remainder plus closing costs and any reserves. Leverage is set per deal and can be lower than the maximum.

Leverage by program Also answered under Fix & Flip Loans

Above a floor, yes. Loan Goat's bridge loan publishes a 650 minimum credit score, fix and flip 620 and construction 600, and above those floors a default, a notice of default, a matured loan or a bailout is weighed against the property rather than ruled out, because the property is what is being underwritten. What we need is a clear story of what happened, equity in the property and an exit we both believe in. Bridge rates run from 9.00% to 13.00%.

Hard money residential bridge

Investment property loans are commonly vested in an LLC, corporation or trust, and lenders generally ask the principals to sign a personal guarantee so the entity is not the only party responsible. The vesting you choose affects title, insurance and how the loan documents are drawn. Loan Goat confirms vesting and guarantee requirements on each deal at the Letter of Intent.

Vesting and guarantees explained

Yes. Investor loans are underwritten on the property, so the length of your self-employment is not the gate it is at a bank. For a home loan, the bank statement program qualifies you on 12-24 months of bank statements and the P&L-only program on your business profit and loss statement, with no tax returns or W2s required. Self-employed borrowers are a large part of who we serve.

Loans for the self-employed Also answered under Bank Financing Loans

Loan Goat's standard is 5-7 days from application to funding, and the hard money residential and commercial bridge loans can close in as quickly as 3 days when title and valuation cooperate. What decides the speed is how fast documents come in and whether the property has title issues. Owner-occupied loans follow consumer rules and take longer.

The borrowing process Also answered under Borrow

For fix and flip and ground-up construction the published list is short: application, SREO (schedule of real estate owned) and proof of funds. Bank statement loans need 12-24 months of bank statements; the P&L-only program needs your P&L statements and business license. If the loan is vested in an entity, expect to provide its formation documents. Most bridge loans need minimal documentation beyond that.

Start the application Also answered under Borrow

Not always. On the hard money residential and commercial bridge loans an appraisal is not needed in some cases, because the loan is sized conservatively against the property. Other programs and higher leverage generally call for an appraisal or a valuation. We tell you which applies when we issue terms.

Bridge loans

You repay the principal by selling, refinancing or completing the project, whichever the plan called for. Loan Goat's edge is that it is also a non-QM lender: if a borrower cannot sell before the note is due, the hard money loan can be refinanced into a 30-year non-QM loan, so maturity is a transition rather than a cliff. Talk to us before the maturity date, not after.

Long-term rental loans

Some programs build the extension in: the interest-only bridge runs one or two years and allows up to two 6 month extensions as long as the loan is current. Other programs handle extensions case by case, with the fee disclosed at the time. The condition that matters everywhere is being current on payments.

Interest-only bridge loans Also answered under Bridge Loans

A bridge loan is short-term financing that carries a property from one point to the next: from purchase to stabilization, from a fast close to a permanent loan, or from one sale to the next acquisition. Investors use it to compete with cash buyers, to buy before selling, to recapitalize equity or to hold a transitional asset. Loan Goat's bridge loan runs one or two years, up to 75% LTV on residential and 70% on commercial, from $150,000 to $25,000,000, with rates from 9.00% to 13.00%.

Bridge loans Also answered under Bridge Loans

It is a good idea when the window is short and the upside is real; it is a bad idea when there is no exit. The alternatives depend on the goal: a rental DSCR loan for a property you will hold, a bank statement loan for a home you will live in, or a bank loan when time is not a factor. We will tell you if one of those fits better than a bridge.

Compare the programs Also answered under Bridge Loans

Loan Goat's bridge loan rates run from 9.00% to 13.00% for qualified borrowers. Points and closing costs are quoted per deal and depend on the loan size, leverage and property. Rates and pricing are subject to change without notice and are not a commitment to lend.

Read the pricing guide Also answered under Bridge Loans

Up to 75% LTV on residential and 70% on commercial, on a purchase or a cash-out, on the bridge loan. The number a specific property supports depends on the value, the lien position and the exit, and it is fixed on the Letter of Intent.

Bridge loan terms Also answered under Bridge Loans

A minimum FICO score of 620, an eligible property (SFR, condo or townhome, 2-4 units), an application, a schedule of real estate owned and proof of funds. First time flippers are allowed. The deal itself has to work: purchase price, rehab budget and after-repair value within the program's 85% of the purchase, 100% of the rehab and 75% of ARV.

Fix and flip requirements Also answered under Fix & Flip Loans

The rehab or construction budget is held back at closing and released in draws as stages of work are completed and verified. Loan Goat's fix and flip program funds up to 100% of the rehab alongside up to 85% of the purchase; ground-up construction offers flexible draws through every stage. Interest is charged only on the drawn balance.

Construction draws Also answered under Fix & Flip Loans

Not on the purchase: the published maximum is 85% of the purchase, so a down payment and reserves are required. Where the program does reach 100% is the rehab, funded through the holdback. If the down payment is the obstacle, the structure is worth a conversation before you walk away from the deal.

Fix and flip loans Also answered under Fix & Flip Loans

Loan Goat's ground-up construction program lends up to 80% LTC including the lot, the build and the interest reserve, so the borrower's contribution is at least 20% of total cost plus closing costs, and the program asks for 2 previous ground-up projects. Land you already own can count toward the equity depending on how the cost is structured. The exact figure comes with the Letter of Intent.

Construction loans Also answered under Construction Loans

A DSCR loan qualifies on the property's rent instead of your income, and the price of that flexibility is usually a higher rate than a conventional mortgage and, at many lenders, a prepayment structure. Loan Goat's rental DSCR loan carries no prepayment penalty and qualifies on the property's cash flow, from 6.50% on the Non-QM tier. The trade-off is the rate against the speed and the freedom from income documentation.

Rental DSCR loans Also answered under Rental Property Loans

On a purchase, yes in practice: the rental DSCR loan goes up to 80% LTV, which leaves 20% plus closing costs. First time investors are OK and DTI is not calculated, so the down payment and the property's cash flow are the two numbers that decide it.

Rental DSCR loans Also answered under Rental Property Loans

Yes. The rental portfolio loan is a fixed rate loan on a portfolio of 5+ rental properties or units, up to 80% LTV, and it can consolidate multiple loans into one. Landlord experience is required and the program offers 5, 7, 30 and 40 year fixed terms.

Rental portfolio loans Also answered under Rental Property Loans

Yes to both. The rental DSCR loan permits short term rental income, ADU income and non warrantable condos, and recently listed properties are OK. The property's cash flow carries the file.

Vacation rental financing Also answered under Rental Property Loans

Across the programs: SFR, condo and townhome, 2-4 units, PUD, multifamily and 2-200 unit apartment buildings, mixed use, retail, office, industrial, medical and land. Which program fits depends on the property and the plan; the property types pages walk through each one. Specialty property types are considered case by case.

Property types we lend on Also answered under Commercial Loans