Loan options for investors
These common loans can finance projects like buying, rehabilitating, and renting out one or multiple properties of different types.
Institutional loans and hard money loans differ in qualification requirements and timelines. Knowing their differences and choosing the best loan for your scenario will save you time and money.
Hard Money Loans 6%-9%
Freddie Mac Optigo 3.20%-4.82%
HUD 223 (f) 2.35%-2.75%
HUD 221(d)(4) 3.15%-3.4%
How hard money loans are different
With hard money loans, private investors fund deals based on the value of your assets, rather than requirements set by the federal government. So hard money lenders don’t require the same strict qualifications as institutional lenders and can set a more flexible loan agreement.
Asset-based deals mean that the property itself is used as collateral and requirements adjust to match your scenario. This adaptability allows for speed, simplicity, and financing that meets your needs, including receiving funding in as little as seven days.
Flexible requirements do come with higher risks for the lender, so hard money loan rates are often higher than government-backed loans. However, many real estate investors prefer the quick cash flow of a hard money loan over the lengthy approval process for a lower rate.
Hard money loans also can have shorter term lengths so the interest is paid over less time than traditional loans. If you can’t pay off the loan that fast, you can refinance it to another loan type with a lower rate.
What moves hard money loan rates
Details of the loan
- Term length of the hard money loan
- Whether the loan is for a purchase, rate and term refinance, or cash-out refinance
- What the loan amount is (between $50,000-$20 million)
Property and investment considerations
- Having a clear plan for the property being invested in
- Property that has value in the current market
- If the property is owner-occupied, a rental, or both
- If it’s for land, single-family, multi-family, commercial, or industrial property
- New construction or rehabilitation costs
- Potential rental income or profit from selling the property
What you can do to lower your rate
- Have a higher down payment
- Show Loan-to-Value of at least 70% or less
- Prove good financial standing (high credit score, solid cash flow, etc)
- Show how you’ll pay off or refinance the loan before term length ends
- Build an ongoing relationship with your hard money lender

What moves hard money loan rates
Details of the loan
- Term length of the hard money loan
- Whether the loan is for a purchase, rate and term refinance, or cash-out refinance
- What the loan amount is (between $50,000-$20 million)
Property and investment considerations
- Having a clear plan for the property being invested in
- Property that has value in the current market
- If the property is owner-occupied, a rental, or both
- If it’s for land, single-family, multi-family, commercial, or industrial property
- New construction or rehabilitation costs
- Potential rental income or profit from selling the property
What you can do to lower your rate
- Have a higher down payment
- Show Loan-to-Value of at least 70% or less
- Prove good financial standing (high credit score, solid cash flow, etc)
- Show how you’ll pay off or refinance the loan before term length ends
- Build an ongoing relationship with your hard money lender