Complete Guide to How Owner-Occupied Private Money Lenders Work
6 minute read
April 13, 2021


If a borrower intends to occupy a property as their primary residence, they will need an owner-occupied loan. If they are looking to improve their business, they can use a business-purpose loan. But what if they don’t qualify for these loans through a traditional mortgage lender?

Owner-occupied loans, which can be business or consumer-purpose, often aren’t available from private money lenders in California. This leaves many borrowers who are looking to refinance, acquire additional mortgages, or expand their business without options.

That’s where Marquee Funding Group comes in. Our team recognizes the need for owner-occupied private money lenders in California and works to serve these unique borrowers. Learn how private money lenders work and how to take advantage of Marquee’s owner-occupied options.

What is a Private Money Lender?

Most borrowers are familiar with conventional mortgages, where you head to the bank or mortgage broker, provide information on credit score, income, and debt, wait several weeks, and finally get approval. But there are many situations banks are unable to approve because they have to meet strict government requirements. A hard money lender however, will make deals with you based on common sense by leveraging their expertise in the industry.

What’s your loan scenario?

Many people aren’t aware of the freedom and options available to them through a private money lender. These types of lenders usually are known for helping investors acquire quick, short-term funds for a variety of projects. But Marquee Funding Group is one of the only hard money lenders in California that also offers long-term consumer loans ranging from 10 to 30 years, with fully amortized payment options.

Marquee Funding Group also offers:

  • Loan amounts from $50,000 to $20 million
  • Commercial, industrial, construction, and land loans
  • Single-family and multi-family loans
  • Fix-and-flip or fix-and-occupy loans
  • Loan-to-value ratio of up to 70%, depending on other factors

The loan-to-value ratio is calculated by dividing the amount borrowed by the appraised value of the property, expressed as a percentage. Most lenders offer mortgage and home-equity applicants the lowest possible interest rate when their LTV ratio is at or below 80%.

Unlike banks, a private money lender works with their experience and industry knowledge to make common-sense decisions. If it makes sense, they will do it, without the need for strict requirements and documentation. Marquee also places a high value on building long-term relationships with its brokers and borrowers. Building mutual trust and respect ensures a lifetime of reliable real estate transactions that benefit both parties.

Only Select Private Money Lenders Offer Owner-Occupied Mortgages

Borrowers today are largely unaware of owner-occupied private money lenders because very few lenders offer these loans in California. This is a result of the Dodd-Frank Wall Street Reform Act, which was signed into law on July 21, 2010, as a result of the 2008 recession.

The Dodd-Frank Act’s purpose was to protect consumers and taxpayers from the investment risks banks take. This included regulating mortgages and requiring better disclosure of what the loans were to homeowners. Banks now have to prove that borrowers understand the risks, and must verify a borrower’s credit history, income, and job status.

Due to these regulations, most hard money lenders left the consumer-lending space, even if they still offer business-purpose loans. Marquee, however, recognized borrowers still need this option. We work to fill the gap left behind by other lenders and help these underserved borrowers. We are determined to do for you what banks cannot.

How Owner-Occupied Private Money Works

Owner-occupied private money lenders such as Marquee Funding Group won’t have many questions for borrowers. We want to know the property address and a short submission story. Our team looks at deals on a case-by-case basis, so requested documentation can vary but will remain much more simple and straightforward than any bank. At Marquee, we look at every situation with open eyes and ears. We’re able to rely on common sense to work with borrowers, rather than the limitations banks face with strict requirements they must follow.

The agents at Marquee Funding Group know it’s our mission to be as efficient and clear as possible. Not all hard money lenders can offer the same thing. We are the ethical standard of the private money loan industry and will be upfront, honest, and transparent during every deal.

Examples of when to use private money loan

Private money lending is suitable for many types of borrower situations. In addition to owner-occupied loans, Marquee Funding Group also offers non-owner-occupied consumer and business loans. The difference between consumer-purpose and business-purpose is what the borrower does with the loan. 

With owner-occupied consumer-purpose loans, you can:

  • Purchase a primary residence
  • Refinance
  • Acquire a second, third, or fourth mortgage
  • Consolidate debt and clean up credit
  • Build a new house
  • Remodel your home
  • Pay a legal settlement
  • Settle a divorce
  • Dissolve a family trust
  • Pay off siblings and heirs/settle estate inheritance issues
  • Resolve probate issues
  • Purchase a property with deferred maintenance or safety issues
  • Refinance a property with deferred maintenance or safety issues
  • Paying off bankruptcy 
  • Get out of a foreclosure

With a business-purpose loan, you can:

  • Purchase or improve a property
  • Operate capital
  • Purchase new equipment
  • Buy out partners
  • Use funds for new business start-up costs

Benefits of private money loans

The largest benefits of private money loans are speed and flexibility. Marquee Funding Group’s average turnaround time on a business-purpose loan is seven days, and about 10 days for a consumer loan. This is much quicker than a bank is able to do.

Marquee Funding Group also does all underwriting, processing, and servicing in-house for a smooth, streamlined process.

A hard money lender’s flexibility comes from their ability to make common-sense decisions and approve deals banks cannot. Marquee Funding Group makes decisions by looking at your bank statements and assets to determine what goes in and out, and what’s left over.

Who is private money lending for?

Along with consumer-purpose and business-purpose loans, private money lending is for real estate investors, house flippers, self-employed borrowers, and those affected by layoffs, legal settlements, or debt. Marquee Funding Group is proud to offer options to those with unique situations who otherwise do not qualify for a loan.

Contact us today to learn more about what we can do for you and to have us review your situation. If you already know what you need, complete this form to submit your loan request, and we will contact you.

Photo by Ralph (Ravi) Kayden on Unsplash

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