How to Get a Hard Money Loan: Requirements, Down Payment & Appraisals

Getting a hard money loan is faster than getting a bank loan, but it isn't automatic. Lenders still review the property, the numbers, and the borrower before they commit capital. This guide walks through what lenders look for, how much you'll need to bring, how the valuation works, and how to put together a request that gets taken seriously.

New to the topic? Start with What Is a Hard Money Loan?

Hard Money Loan Requirements

Each lender has its own guidelines, but most review the same core items:

The property: address, type, condition, and current value
The deal: purchase price, rehab budget and scope of work, and after-repair value if applicable
Down payment and reserves: proof you can cover your equity, closing costs, and a cushion for payments and overruns
The exit strategy: sale, refinance, or another documented repayment plan
Experience: prior flips, rentals, or projects — first-time investors can qualify, often with lower leverage
Credit: reviewed, and it affects pricing and leverage, but most programs don't hinge on a high score
Entity: many lenders prefer or require the loan to close in an LLC or corporation

Hard money is for investment and business-purpose properties. Owner-occupied primary residences generally fall under consumer lending rules and are a different product.

How Much Down Payment Do You Need?

Expect to put meaningful cash into the deal. General ranges:

Purchase or bridge: commonly 25–35% down, based on loan-to-value limits of about 65–75%
Fix-and-flip: often 10–20% of the purchase price, with a portion of the rehab budget financed, capped at a share of ARV
Plus closing costs and reserves: points, title, escrow, and several months of interest payments

Stronger experience, a well-located property, and a conservative budget generally improve leverage. A first deal, a rural property, or an aggressive ARV usually means bringing more cash.

Appraisals and Property Valuation

Because the loan is sized to the property, the valuation drives everything. Depending on the lender and deal size, value is set by:

A full appraisal — common on larger loans and refinances
A broker price opinion (BPO) or desktop valuation — used by some lenders for speed on smaller deals
An as-repaired (ARV) appraisal — for rehab projects, based on your scope of work and comparable sales

The lender's number — not your number — determines the loan amount. If your ARV relies on the best comp in the neighborhood, expect the valuation to come in lower. Building your budget around conservative comps avoids surprises at closing.

Documents to Have Ready

Purchase contract (or current deed and mortgage statement for a refinance)
Scope of work and rehab budget, line by line
Comparable sales supporting your ARV
Bank statements showing down payment and reserves
Entity documents (articles, operating agreement, EIN)
A short track record — addresses, purchase and sale prices of past projects
Government ID and authorization for a credit review

The Process, Step by Step

Step 1 — Submit the deal. Property details, purchase price, loan amount requested, rehab budget, and exit plan.

Step 2 — Initial review. The lender reviews the numbers and indicates whether the deal fits and at what general leverage.

Step 3 — Term sheet. If it fits, you receive written terms: amount, rate, points, term, and fees.

Step 4 — Underwriting and valuation. Appraisal or valuation is ordered, documents are verified, and title is opened.

Step 5 — Closing. Loan documents are signed and funds are wired through escrow. Rehab funds, if any, are released in draws as work is completed.

On a clean file, this can take one to three weeks. Missing documents, title issues, or a valuation gap are what slow it down.

Common Reasons Hard Money Requests Get Declined

No credible exit strategy
The ARV or budget doesn't hold up against real comparables
Not enough cash for the down payment plus reserves
Thin margins that leave no room for overruns or delays
Title problems, unpermitted work, or property issues found in due diligence

How to Strengthen Your Request

Lead with the numbers: purchase price, budget, ARV, and loan amount in one clear summary
Use conservative comps and include a contingency line in your budget
Show reserves beyond the minimum
Document your exit — a refinance lender's pre-approval or a realistic sale timeline
Include your track record, even if it's only one or two projects

The Bottom Line

Hard money is flexible, but it's still underwritten. Come prepared with a solid deal, real cash in the project, a realistic valuation, and a clear exit, and the process moves quickly. Our team reviews every request on those fundamentals before any terms are discussed.

See our hard money lending program →

Submit your deal for review →

Also read: Private Money Loan Requirements

CA Business Capital is a California-based lending advisory service connecting real estate investors and business owners with lenders across the country. Contact: info@cabizfunding.com | 559-549-4717

How to Get a Hard Money Loan: Requirements, Down Payment and Appraisals