LOAN TYPES

Loan Types 

About Hard Money Loans

A hard money loan is a loan secured by the equity of a real estate property. They are usually arranged at higher interest rates than conventional commercial or residential property loans. In reality, every hard money loan is different. There are many other factors that affect individual hard money loans, including: equity, ownership occupancy status, property type, property age and condition, deferred maintenance, location, co-borrowers, market trends, availability of lenders and other factors. Most of the factors above can be mitigated with one word: equity. 

The industry began in the late 1950s when the credit industry in the U.S. underwent drastic changes (see FDIC: Evaluating the Consumer Revolution). Hard money loans or private money loans are terms that are used almost exclusively in the United States and Canada where hard money loans or private money loans are most common. In commercial real estate, hard money or private money was developed as an alternative for property owners seeking capital against the value of their holdings. The speed and flexibility of the hard money or private money lender to provide the loan was the answer. The industry eventually spread to the residential markets.

Mixed-Use Hard Money
Also Known as Multi-Family Hard Money

Mixed use hard money loans are a type of borrowing instrument utilized by those wishing to invest in commercial and residential properties for money-making purposes. An example of a mixed use property is an apartment building with stores on the bottom floor or a church with a school. These loans are usually provided via private lenders like Saxe Mortgage, rather than via banks and mortgage companies. The interest and pay back terms may be a bit higher and shorter than traditional lenders as far as level of interest rate and number of years required to pay off the balance.

For example, banks may provide money for mixed use purposes for 6-8%, while private hard money mixed use lenders may ask for 9-14% interest. These types of mixed use loans are not meant to be long term loans, although terms as long as 5 years out can be obtained. Rather these types of mixed use hard money loans are also at times called bridge loans, and are for investors needing cash right away for the short term.

One example of mixed use hard money loans is for investors buying apartment buildings which will be rehabbed and then put right back onto the market and sold for a profit. The borrower is only interested in obtaining the cash to purchase and flip the property, hopefully selling it off before the terms of the mixed use loan becomes due. Some investors will want to buy vacant land or commercial property that will be used for a variety of reasons: retail, storage, health, etc. These types of investments are considered to be non-conforming and are more suitable for mixed use private or mixed use hard money lenders.

Mixed use hard money loan lenders are interested in getting their cash back with the interest, and therefore, if something can be worked out with borrowers who have experienced bankruptcies, foreclosures, difficulty in coming up with down payments, self-employed situations, etc., then they will go ahead with the deal. As long as the lender thinks they can get their investment back out of the property plus interest, then there is a good chance for obtaining the mixed use hard money loan. The process is extremely easy, and in most cases, the borrower can get the funds in less than 7 days.

For investors interested in new construction, mixed use hard money loans can be the solution. The funds are usually put into an escrow account to be used as needed in the form of draws as the construction is completed stage by stage. A mixed use bridge loan may not work here, because if the property being built is a large apartment complex, most likely it will take two to three years to complete all the phases, and most bridge loans are for no longer than two years. Therefore, a lending instrument will need to be obtained that will be sure to cover all the months of build-out needed for the project.

There are mixed use hard money loans provided by lenders like Saxe Mortgage who specialize in lending to investors wishing to borrow large amounts of money, even into the millions of dollars for commercial uses such as building assisted living centers, medical centers, storage facilities and entertainment parks. These lenders are interested in the loan-to-value ratio, searching for equity in property generally not above 70%. That is, the borrowed amount will not be greater than 70% of the worth of the property. In all cases, the lender is interested in understanding how the borrower plans to pay back the loan. The client needs to have all of that figured out at the time the loan is taken out. The lender does not want to take back the property.

Mixed use hard money loan lenders may request that an appraisal of the property be conducted as part of the process of approving a loan of this type, because they are making lending decisions based on the value of the property in question. This is why they can by-pass all the traditional lender paperwork requests required in putting together traditional mortgages. This is also why the loan can be put together in a relatively short period of time, which is ideal for people who need cash quickly to close on an investment.

No Seasoning Private Money Loans
Also known as No Seasoning Hard Money

What is a no seasoning private money loan?

The question of how to get and what is a no seasoning private money loan comes up quite often. This type of loan is needed when a person is acquiring a property to flip or rehab, or inheriting a property that needs to be refinanced at the market value. It is very common for an investor to need a no seasoning private money loan when purchasing a property to rehab. In a flip or rehab project, the purchase price is well below the after repaired value. Some lenders will lend you a no seasoning private money loan on the future or after repair value. It is often customary for the lender to hold back some money for the repairs and give them out for each phase, ensuring the repairs are completed. This frees up the needed cash to do the repairs and flip the property (using another person’s money).

Are there any no seasoning private money loans available?

The answer is yes! There are no seasoning private money loans available in the San Francisco Bay Area. There are loan officers ready to help you today. Just be ready when you make the call to have a contractor’s list of what needs to be done and priced accordingly. The more detailed you are, the smoother the transaction will go.

What if I just inherited a home or building and need a no seasoning private money loan quickly? Maybe to cover other debt or past taxes. 

No problem; a no seasoning private money loan is right for this situation. If you just inherited a home or building and need cash to cover expenses, call us today.

Where do I get a no seasoning private money loan in the Bay Area or San Francisco? 

You are on the right site. A Saxe Mortgage no seasoning private money loan is waiting for you today. Please understand that products change from time to time, so call us to discuss our current loan products.
Real Estate Forms
Bad Credit Loans

Looking for a hard money bad credit loan? Looking for a hard money poor credit mortgage loan?

All you have to do is call us. It's that easy. We are most concerned with your ability to service the loan and the equity you have in your property. 

Just think of us as an online shopping center for all your hard money bad credit loan or hard money poor credit mortgage loan needs. Finding a loan has never been faster. If you have good credit or bad credit, we can help you. And NO, we are not a broker. We are the lender!

Do you already know the type of hard money bad credit loan or hard money poor credit loan you need? Do you need to refinance, or are you making a purchase? Do you know the hard money rates that are competitive? We can help you. Fast. With just a quick call to us and within minutes, you can know exactly what you need and what you have access to.

Finding a hard money bad credit loan or hard money poor credit mortgage lender does not have to be hard. The market is coming back. It's a buyer’s market and you need to get in and find a lender that's going to be just right for you. We believe Saxe Mortgage is your one-stop shop for Bay Area hard money.
Commercial Lending
Also known as Commercial Hard Money

Commercial Lending Hard Money

Commercial lending hard money is what Saxe Mortgage specializes in! It is similar to traditional hard money, but may sometimes be more expensive, as the risk is higher on investment property or non-owner occupied properties. Commercial lending hard money loans may not be subject to the same consumer loan safeguards as a residential mortgage may be in the state the mortgage is issued. Commercial lending hard money loans are often short term and therefore interchangeably referred to as bridge loans or bridge financing.

Commercial Lending Hard Money Lender or Bridge Lender Programs

The definition of "hard money commercial lending" when referred to in real estate financing is essentially a non-bankable loan. The name hard money commercial lending is frequently interchanged with "no-doc" or private loans. For a hard money commercial lending loan, the underwriting decisions are based on the borrower's hard assets (real estate). Hard money commercial lending loans typically close relatively quickly. Saxe Mortgage is the leader in the Bay Area - San Francisco for hard money commercial lending (NO-DOC / Private lending).

Commercial lending hard money lender and bridge lender programs are similar to traditional hard money in terms of loan-to-value requirements and interest rates. A commercial lending hard money or bridge lender will usually be a strong financial institution that has large deposit reserves and the ability to make a discretionary decision on a non-conforming loan. These borrowers are usually not conforming to the standard Fannie Mae, Freddie Mac or other residential conforming credit guidelines. Since it is a commercial lending property, they usually do not conform to a standard commercial lending loan guideline either. The property and/or borrowers may be in financial distress, or a commercial lending property may simply not be complete during construction, have its building permits in place, or simply be in good or marketable conditions for any number of reasons.

Some private investment groups or bridge capital groups will require joint venture or sale-lease back requirements to the riskiest transactions that have a high likelihood of default. Private investment groups may temporarily offer bridge or hard money, allowing the property owner to buy back the property within only a certain time period. If the property is not bought back by purchase or sold within the time period, the commercial lending hard money lender may keep the property at the agreed price.

Hard Money Commercial Lending Verses Traditional Lending

Traditional loans from banking institutions rely heavily on borrower’s income, credit, tax returns, etc., as opposed to a hard money commercial lending loan's primary reliance on the hard real estate asset. Along with requiring substantially more documentation, conventional lenders have minimum credit scores (typically low 700 Fico and above) as opposed to hard money commercial lending loans that are underwriting on the collateral as opposed to the borrowers’ credit. Along with different underwriting standards, loans on conventional commercial lending loans can take months to close; hard money commercial lending loans close much quicker. The final important differentiator between hard money commercial lending financing and conventional financing is the interest rate. Since there is more risk in a true collateral based loan, the interest rates are higher than a conventional mortgage.

How to Know if a Commercial Lending Loan is Right For Me

There are numerous circumstances in which a hard money commercial lending loan is the best option for a client.

  1. Borrowers with impaired credit 
  2. Tax Liens/judgments/unpaid utility bills, etc.
  3. Partner Buyout
  4. Owner occupied properties
  5. Time constrained borrowers
  6. Foreclosure avoidance
  7. Foreign nationals
  8. Complex loans with multiple pieces of collateral
  9. Deferred maintenance

Equity Loans

We will refer to these loans simply as hard money equity loans. There are many myths and misconceptions about hard money that should be cleared up. The first and foremost of these myths is that a private investor is making a loan because he wants to foreclose and get access to the equity in the home. While there may be some cases in which this is true, the vast majority of hard money investors are looking to make regular monthly interest profits and NOT go through the hassle of foreclosing on your home. Should the lender have to foreclose, they are looking at many months where they will receive no profits on their funds.

People use hard money equity loans for a variety of reasons. As mentioned previously, conventional and government lenders are continuing to further tighten their credit and underwriting guidelines, making it more and more difficult for investors and homeowners to get access to the equity in their homes. Some of the most common scenarios we encounter from people using hard money equity loans include:
  • Inherited a property that is free and clear, and have no credit or bad credit to get approved to pull cash out of it.
  • Paid cash for a property recently and need to get cash out of it (conventional and government loans require 12 months seasoning on title where hard money loans have no seasoning requirement at all).
  • Already have more than four properties financed (conventional and government loans will now allow more than four properties to be financed or they will not approve a loan, hard equity money loans have no financed property limitations).
  • Property types and conforming and government loans are allowed with hard money equity loans such as mobile homes, raw land, condos and town homes. 
  • Investors looking to purchase a home and need to close fast (conforming and government loans can take 30-45 days but hard money loans can close in 3-5 days).
Not all hard money equity loans are the same. There are two different types of hard money equity loans that you can consider using:
  1. SIVA (Stated Income Verified Assets) Hard Money Equity Loans or SISA (Stated Income Stated Assets) – These are true hard money equity loans. The lender is lending money based strictly on the amount of equity you have in your home, and you either state or verify your income. These loans close very fast as the only thing to do is arrive at a fair value on the home and ensure the title work is in order. Interest rates on a SIVA (Stated Income Verified Assets) or SIVA (Stated Income Verified Assets) hard money equity loans can run higher than on a 10-30 year fixed rate mortgage.
  2. Full income documentation equity loans – These loans allow the homeowner to get interest rates closer to 10% on a 20-30 year fixed rate mortgage. These fully documented hard money equity loans allow investors and homeowners that can prove their income to receive better terms. These loans help fill the gap for investors with more than four properties financed, investors that need to close quickly on their home using hard money equity loans, and home owners with poor credit that banks will not finance. If you have been considering a hard money equity loan or have been turned down by the bank but have equity in your home, we highly recommend calling Saxe Mortgage today. By this time next week you can have your equity in your bank account!
Private Money Loans
The Bay Area real estate market is prime for investing. It is an excellent time for the private money loan or the hard money loan to help investors capture some of the gains that will happen over the years to come. 

When people speak of a private money lender or hard money lender, usually, they are referring to a person or company like Saxe Mortgage who has a large sum of money and is willing to lend the money to people as long as the loan is secured by real estate. The private money lender is concerned with the borrower’s ability to pay but less with regards to credit worthiness. The company is mostly concerned with lending a set amount of money according to the value of the property. The private money loan used to be designed to help people who are in a financial crisis of one sort or another, but today it is more for the savvy business or real estate investor.

There is no shortage of people who need private money and are in a financial crisis needing to borrow money today. There are thousands of people that are facing losing their homes or commercial buildings to a short sale or bank foreclosure, due to the drop in real estate values and the economy. This has made an ideal climate for the private money or hard money lender. This can be a good situation for both the lender and the borrower or the savvy business or real estate investor in the right instance.

The private money or hard money loan will be secured by the property. The private money lender will make sure his money is secure. One way is that the lender will not lend more than a certain percent of the present value of the property. This insures that if the borrower defaults, he can sell the property for at least, if not more, than the original loan amount.

There are many options for lending private money. Call Saxe Mortgage today and talk to an expert who will help structure your private money loan.

Hard Money Loans
Hard money is similar to traditional hard money, but may sometimes be more expensive as the risk is higher on investment property or non-owner occupied properties. Hard money loans may not be subject to the same consumer loan safeguards as a residential mortgage may be in the state the mortgage is issued. Hard money loans are often short term and therefore interchangeably referred to as bridge loans or bridge financing.

What is a San Francisco hard money commercial loan?

The definition of "hard money commercial," when referred to in real estate financing, is essentially a non-bankable loan. The name hard money commercial is frequently interchanged with "no-doc" or private loans. For a hard money commercial loan, the underwriting decisions are based on the borrower's hard assets (real estate). Hard money commercial loans typically close relatively quickly. Saxe Mortgage is the leader in Bay Area - San Francisco hard money commercial lending (NO-DOC / Private lending).

Commercial hard money lender and bridge lender programs are similar to traditional hard money in terms of loan-to-value requirements and interest rates. A commercial hard money or bridge lender will usually be a strong financial institution that has large deposit reserves and the ability to make a discretionary decision on a non-conforming loan. These borrowers are usually not conforming to the standard Fannie Mae, Freddie Mac or other residential conforming credit guidelines. Since it is a commercial property, they usually do not conform to a standard commercial loan guideline either. The property and or borrowers may be in financial distress, or a commercial property may simply not be complete during construction, have its building permits in place, or simply be in good or marketable conditions for any number of reasons.

Some private investment groups or bridge capital groups will require joint venture or sale-lease back requirements to the riskiest transactions that have a high likelihood of default. Private investment groups may temporarily offer bridge or hard money, allowing the property owner to buy back the property within only a certain time period. If the property is not bought back by purchase or sold within the time period, the San Francisco Commercial hard money lender may keep the property at the agreed to price.

Hard Money Commercial Lending Verses Traditional Lending

Traditional loans from banking institutions rely heavily on the borrower’s income, credit, tax returns, etc., as opposed to a hard money commercial loan's primary reliance on the hard real estate asset. Along with requiring substantially more documentation, conventional lenders have minimum credit scores (typically low 700 Fico and above) as opposed to hard money commercial loans that are underwriting on the collateral as opposed to the borrower’s credit. Along with different underwriting standards, loans on conventional commercial loans can take months to close; hard money commercial loans close much quicker. The final important differentiator between hard money commercial financing and conventional financing is the interest rate. Since there is more risk in a true collateral based loan, the interest rates are higher than a conventional mortgage.

When is a hard money commercial loan appropriate?

There are numerous circumstances where a hard money commercial loan is the best option for a client.
  1. Borrowers with impaired credit 
  2. Tax Liens/judgements/unpaid utility bills, etc.
  3. Partner buyout
  4. Owner occupied properties
  5. Time constrained borrowers
  6.  Foreclosure avoidance
  7. Foreign nationals
  8. Complex loans with multiple pieces of collateral
  9. Deferred maintenance
Hard Money Investment Loans
Hard money investor loans are provided by hard money lenders like Saxe Mortgage for purchase of real estate and for other such investments. Through hard money investor loans, fast access to capital is achieved for the purpose of real estate investment. In many circumstances, hard money investor loans prove to be a wise decision.

Borrowers have many questions and often doubts regarding hard money investor loans and due to these, they are not able to take any concrete decisions. The biggest reason for most of the confusion is understanding the difference between a hard money loan and the conventional mortgage loan.

Conventional mortgage loans are provided on the basis of credit rating, income, etc., while hard money investor loans are the asset-based loans. Funding is done in a quick manner in hard money investor loans and a person can expect to get funds for investing in real estate, at times in less than 72 hours.

These loans are provided for commercial projects, residential units like single family homes and other types of real estate. Due to the qualifying requirements, hard money investor loans have higher rates as compared to conventional mortgages.

These rates may vary with the market. Higher interest rates on hard money investor loans have proved as a restriction for many non-astute investors. Smarter investors understand the time value of money and are less interested in the rate. Loan-to-value on hard money loans is normally <70%.

Repayment of hard money investor loans are also short as compared to conventional mortgages. Some programs have a repayment period from 6-12 months, and others up to five years. Hard money lender's requirements include vacant dwelling insurance, flood certificate, inspection etc. Costs regarding these with conventional mortgages are the responsibility of the borrower. Hard money investor loans offered by many lenders also carry origination points. The credit check is one factor that has made hard money investor loans very popular. Although a credit check is done, it is generally not for the score but to check for liens and judgments before offering asset based loans. These types of loans have attracted people with bad credit in huge numbers in making investments.

Minimum and maximum loan amount differs from one source to another. These may be $25,000 and $1,000,000. Appraisals are often required by the hard money lenders for offering loans but can sometimes be waived if the loan is close to where the lender is.

Easy availability, and asset based lending are the key features of hard money investor loans. Call a Saxe Mortgage representative today to learn about these loans.
Hard Money Bridge Loans

What is a hard money bridge loan?

A hard money bridge loan is a short-term loan made by a private lender, like Saxe Mortgage, as opposed to a traditional financing institution, such as a bank. A hard money loan occurs when circumstances are not favorable for a borrower to obtain a bank loan for various reasons.

Why would a borrower choose a hard money loan instead of conventional bank financing?

The answer is usually time-based. Ex.: a borrower has applied for a conventional commercial bank mortgage, but the time-of-the-essence closing date is rapidly approaching and the bank is still completing its due diligence, yet the borrower must close in a timely fashion in order to avoid losing a hefty contract deposit. Or, there is deferred maintenance that needs to be completed before the bank will lend on the property. The borrower therefore chooses to finance with a hard money bridge loan, and then after this “bridge loan” closes, the borrower can take as long as necessary to arrange permanent commercial financing.

Another scenario in which a borrower would choose a private hard money bridge loan involves the purchase of a vacant property that the borrower plans to convert to another use (i.e. office to residential). A bank would rather finance the deal AFTER the borrower has executed his business plan, rented the property, and created cash flow. A hard money bridge lender is willing to get more deeply involved than most banks, evaluating the borrower’s track record, the viability of the borrower’s current business plan to convert/improve the property, as well as the borrower’s personal guarantee or other collateral. The borrower is also fully aware that he is only going to have the private hard money loan outstanding for approximately 12 months, and that paying a higher rate of interest for a brief period of time is much less expensive than bringing in much more expensive equity partners for the long haul.

If you are looking for a hard money bridge loan, Saxe Mortgage is here to help. Please give us a call for more information. We are here to help.

Bay Area hard money is similar to traditional hard money, but may sometimes be more expensive as the risk is higher on investment property or non-owner occupied properties. Bay Area hard money loans may not be subject to the same consumer loan safeguards as a residential mortgage may be in the state the mortgage is issued. Bay Area hard money loans are often short term and therefore interchangeably referred to as bridge loans or bridge financing.
Hard Money 2nds
(Also known as Private Money 2nd loan)
A hard money 2nd loan is a specific type of asset-based loan financing through which a borrower receives funds secured by the value of a parcel of real estate. Hard money 2nd loans are typically issued at much higher interest rates than conventional commercial or residential property loans and are almost never issued by a commercial bank or other deposit institution. Hard money 2nd is similar to a bridge loan, which usually has similar criteria for lending as well as cost to the borrowers. The primary difference is that a bridge loan often refers to a commercial property or investment property that may be in transition and does not yet qualify for traditional financing, whereas hard money 2nd often refers to not only an asset-based loan with a high interest rate, but possibly a distressed financial situation, such as arrears on the existing mortgage, or where bankruptcy and foreclosure proceedings are occurring. But this is not always the case. A hard money 2nd loan can be deeded for repairs or deferred maintenance that needs to be accomplished to acquire more tenants.

Many hard money 2nd mortgages are made by private investors like Saxe Mortgage and generally in their local areas like San Francisco. Usually the credit score of the borrower is not as important, as the loan is secured by the value of the collateral property. Typically, the biggest loan one can expect would be between 65% of the property value. That is, if the property is worth $100,000, the lender would advance up to $65,000 against it. If there was already a first loan of $50,000 then a hard money 2nd for $15,000 would be attainable. This low LTV (loan to value) provides added security for lenders, like Saxe Mortgage and their investors, in case the borrower does not pay and they have to foreclose on the property.

Hard money 2nd lenders structure loans based on a percentage of the quick-sale value of the subject property. This is called the loan-to-value or LTV ratio and typically hovers between 60 and 70% of the market value of the property. For the purpose of determining an LTV, the word "value" is defined as "today's purchase price." This is the amount a lender could reasonably expect to realize from the sale of the property in the event that the loan defaults and the property must be sold in a one- to four-month time frame. This value differs from a market value appraisal, which assumes an arms-length transaction in which neither buyer nor seller is acting under duress.

Below is an example of how a commercial real estate purchase might be structured by a hard money 2nd lender:

Total LTV 65% of Quick Sale Value

50% First Loan (Conforming Loan)

15% Hard Money 2nd
Share by: