Hard money (private money) loans are real estate loans funded by private investors. Loan brokers and borrowers often turn to private money for transactions that fall outside of the more restrictive, conventional loan programs offered by banks.
Foley Mortgage is a direct hard money lender. We originate, underwrite, fund and service loans right here in our San Jose office. At Foley Mortgage we take a common-sense approach to underwriting so you don’t have to worry about inflexible loan conditions.
- Loan amounts from $100,000 – $1,600,000
- Residential loans up to 70% loan to value
- Commercial loans up to 65% loan to value
- Terms from 6 to 60 months
- Condition issues ok
- Loans to irrevocable trusts
- Properties in probate ok
- Non-owner occupied
- Flexible credit criteria
- No limits on cash out
- Ability to repay is required
- Bridge loans, owner occupied
- Lots, ranches, up to 50% loan-to-value
- Loans made in the greater San Francisco Bay Area only
Condition Issues
Example
This buyer/investor had a difficult time finding an affordable investment property in Palo Alto. After an exhaustive search, she finally got into contract on this fixer upper. Then as her financing contingency was about to expire, the lender pulled the plug and denied her loan due to poor condition. Panic set in: there were back-up offers and she was about to lose her deposit.
Solution
Foley Mortgage submitted loan documents to title in four days, fulfilling her dream of owning an investment property in Palo Alto. She now has a year to fix up the property and qualify for a conventional loan.
- Term: 12 months
- Loan Amount: $350,000
- LTV: 28%
Properties Held in Estate Trusts or Probate
Banks and conventional lenders often won’t lend to heirs, executors or successor trustees. This limits the executor’s ability to pay taxes, buy out heirs or get a loan to fix up the property. Foley Mortgage has no such limitation and is glad to make a hard money loan on inherited estates or properties in probate.
Example
A successor trustee (son) wanted to keep the San Jose family home after his mother died, but his siblings wanted to sell. He hoped to get a loan against the property to buy out his siblings, but banks and conventional lenders won’t lend to successor trustees because they are not seen as individuals. The son’s attorney and CPA advised them that the loan had to be made to the estate trust.
Solution
A hard money loan made to the estate trust. The money was used to buy out the three remaining heirs.
- Term: 5 Years
- Loan Amount: $345,000
- LTV: 65%
Commercial, Multi-Family and Mixed-Use Properties
Busy real estate investors are weary of the lengthy application and documentation processes that banks require for commercial real estate financing. At Foley Mortgage, underwriting takes a simpler approach: is there sufficient equity (up to 65% LTV) and how will the payments be made?
Example
After their father passed away, the heirs of this Oakland apartment building had to pay property taxes and complete deferred maintenance. Some of the heirs weren’t ready to sell just yet. The property was in probate and after court approval, Foley Mortgage came through with a half million dollar loan to the estate.
Solution
A hard money loan to the estate. The heirs used the funds to pay bills and improve the property.
- Term: 2 Years
- Loan Amount: $500,000
- LTV: 25%
Bridge Loans (Swing Loans)
A bridge loan is temporary financing (typically 6-18 months) used to complete a real estate purchase until a conventional home loan or SBA financing comes through.
Business Purpose Loans
Are you starting a business or do you need a cash infusion for an existing one? If you’re unable to meet the strict underwriting criteria required by your conventional lender, give us a call, a hard money loan may be the solution. Foley Mortgage has been helping small businesses realize their full potential since 1957.
Lots, Ranches, Acreage and Tear-Downs
At Foley Mortgage we can loan on vacant lots, unimproved acreage and tear-downs. The maximum loan-to-value is 50% and the borrower must document that they have the ability to re-pay.
1031 Exchange Completion Loan
The short timeline of a 1031 exchange can instill fear in the heart of even the most seasoned real estate investor. This type of loan is helpful if a deadline is looming and quick financing is needed.
Learn More from our Videos
What is Hard Money?
Private money (also known as “hard money”) is a commonly used term in banking and finance. It refers to equity based lending to a company, trust or individual by a private individual or organization.
Real Estate Loans for Estates, Trusts & Probate
Trustor (mom) of the family estate dies, and successor trustees (kids) find themselves in a predicament, unable to borrow money against the equity of their inherited home to fix it up.
This leaves few options except to sell the family home as-is. Banks and conventional lenders won’t loan to successor trustees (kids) because they are not seen as individuals. This could limit the heirs ability to buy each other out or get a loan to fix up mom’s old home and put it on the market.
