BORROWERS: FAQ


In what geographic areas do you lend?

We are a Texas-based lender currently operating in Dallas areas.

Who benefits from using HMF-hard money loans?

Those real estate investors who don’t qualify or don’t want to deal with traditional bank loan requirements.

Our criteria for qualification is less stringent compared to that of banks. We move more quickly and require less documentation. Unlike banks who evaluate you, the borrower, hard money lenders like HMF evaluate the investment property as our primary qualification. HMF uses the after-repaired value to evaluate your loan, something few banks will consider.

How do you determine my interest rate?

The typical consideration in lending are the 4 Cs - Collateral, Character, Capacity, and Credit. With primary focus on the collateral. We will be happy to provide you with a quick term sheet based on the property information you provide. Typical rates range 12-15%.

Will you lend on my homestead?

No. Our loans are considered commercial loans. We do not lend on a borrower’s current residence/homestead nor commercial properties like rehab, rentals, etc. if inhabited by the borrower.

I'm better off with a traditional mortgage, right?

Yes - hard money loans are short-term, high-interest loans and will only make sense for investors who are planning to refinance or sell their property in 3-12 months. If you are not getting enough value within a short period of time and you qualify for a traditional mortgage, then this will be less expensive and a better option for you than a hard money loan.

Why should I use a hard money loan?

Speed. HMF process is simple. Unlike traditional bank loans, we don’t require tax returns, personal financial statements, etc..

Hard money loans are more expensive but quicker to process with few questions and restrictions. HMF can be the perfect solution for investors who are getting an excellent deal that needs to close quickly and also for those who have a number of outstanding loans (those who have reached 4-loan, or 10-loan lender’s limit) by helping you continue to leverage your real-estate investments.

Who uses hard money loans?

  • New real estate investors who cannot show sufficient income flow or cash reserves to be qualified by traditional banks.
  • Investors with poor credit
  • Investors with undocumented income
  • Investors with short work history
  • Investors who are experienced and have more than 4 mortgages in their name
  • Investors buying properties that need significant repairs
  • Buyers who need renovation funding, not just purchase funds
  • Investors who don’t have the cash required to close with a conventional loan
  • Real estate investors who are highly leveraged elsewhere
  • Buyers of properties that won’t appraise as-is for an acceptable value
  • Buyers dealing with distressed sales that must close in days, not weeks
  • Buyers of rental properties that are problematic (under-rented, in need of repair)
  • Property owners with high equity who need quick access to cash for any reason

Will you lend to my LLC?

Yes, most of our loans are made to real estate investment companies.

Do I have to have cash at closing?

In most instances you need to have cash to cover closing costs and your part of the equity. However, there are instances where your purchase price is really good where you won't need much or any cash at closing.

Are there any up-front costs?

Yes. We do charge a small upfront processing fee depending on the amount of your loan, but we don’t get anything unless we fund your deal. You will also need to pay for: 

  • Survey and inspection if you choose to have one
  • Appraisal services for certain loans that may require it
  • Small fee for document preparation from our attorney

What do I pay at closing?

All origination points at paid at closing and taken out of the loan plus any processing and legal fees to our attorney included in your term sheet. The rest of the costs are typical transaction costs that your title company will assist with such as title insurance, survey, escrow fee, printing, delivery, etc.

Can I use a hard money loan to buy and repair a property?

Yes. You can use HMF hard money loans to buy, rehab and flip your property.

What if I borrow money for construction or rehab? Do I get that money at closing?

The rehab/ construction holdback amount is placed in an escrow account where you can make draws upon completion of each stage of the work. It is important to make sure you have some cash on hand to begin the work to cover deposits for your contractor, as draws are paid upon completion of the work.

What's your time frame for approval?

We will give you a “yes” or “no” on your deal within 24 hours. With a rush fee applied, we have the capacity to fund loans on the same day or the next if necessary.

How long does it take to close with a hard money loan?

Typically it takes 5-7 business days from initial contact to funding if your title commitment, survey and seller are ready to go.

Do you allow deferred payments?

No, it is important to keep payments on time to prevent the loan from going into default.

What criteria do you use to approve borrowers?

Hard money loans are primarily asset-based, so our main focus is the value of the property. We research and determine the market value of the property and establish what we’re willing to lend, typically about 75% or less of the after-repaired value. We do take other factors into consideration including investor experience, location and rental income.

What credit score are you looking for? Do you verify employment Reserves?

Our minimum FICO score is 550. However, if you have a good credit score, we can discount your interest rate. We do not verify employment, reserves or DTI.

Can I use your hard money loan program if I already own 4 (or 10, or 20) properties?

Yes, our hard money loan programs are ideal for investors who own too many investment properties for a traditional lender to finance them. We do not have a limit on the number of mortgage loans you can have out. If you have the equity and 75% loan to value or less can meet your needs, we can help.

Will you do a cash-out refinance on a property I already own?

Yes, if you have at least 35% equity in the property and you need quick access to cash our hard money loans could be a perfect solution.

What is the minimum amount you will loan?

Our minimum loan amount is typically $150,000.

Am I required to use your title company and attorney?

Our attorney prepares the documents and you will pay their fee for preparing them at closing. We don’t require borrowers to use our title company; it’s usually chosen by the seller. We do require title insurance in our name for (at least) the loan amount.

What is your early payment fee or penalty?

There are no prepayment penalty fees!

Do your points vary with the term of the loan or is it always 3 points on all loans? Would you consider a longer loan term?

We are flexible on the loan terms structure sometimes a higher interest rate makes better sense and to pay less points if you plan on paying it off quickly. Longer term loans are welcome and decided on an individual basis.

Can I borrow hard money for a rental property?

Yes, but because our loans have a 1-year term you will need to refinance before your 12 months are up. Also be aware that our retail value will be heavily weighted on recent comparable sales, not necessarily income.

If I want to keep the property for a rental, how long will it take to refinance?

Refinancing terms vary greatly depending on the lender you refinance with and your personal financial situation, but 4 to 6 months is certainly possible.

Do you lend on multi-family properties?

Yes, we have vast experience in the multifamily space and will be happy to offer solutions and assist with multifamily acquisitions.

Do you lend on commercial properties?

Yes, we welcome any commercial properties, the collateral is always the most important component, if you have a good deal you can count on us to help you acquire it.

Will you lend on land?

Yes, but only to experienced investors with a clear exit plan. Loan to value on land is restricted to 50%.

What if I need more than one year?

We will consider extensions, but you should be prepared to sell or refinance by the time your loan term ends. Extensions are not guaranteed.

How do I get a pre-approval letter to submit with my offers?

Call or contact us with your business name and contact information. Most sellers and real estate agents will view an offer accompanied by our pre-approval letter as a “same as cash” offer. Commitment letters can also be provided once we have approved your loan.

What's different about HMF Hard Money Fast Investments?

We are a small group of experienced Austin real estate investors. We lend private money, are not a fund and service our own hard money loans. We are very fast and can be very creative.

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