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Hard money lenders evaluate four things: the property's value, the deal economics, the borrower's experience and financial condition, and the exit strategy. Unlike banks, income and employment history are not the primary drivers. A strong deal with a credible exit can get funded even when a conventional lender would say no.
Conventional lenders underwrite the borrower first. They want two years of tax returns, W-2s, a low debt-to-income ratio, and a long credit history. The property is collateral, but the borrower's financial life is the primary qualification.
Hard money lenders underwrite the deal first. The property's value and the transaction economics drive the decision. The borrower matters — but a solid deal with a credible borrower gets funded even if that borrower has quirky financials or unconventional income.
This is why real estate investors use hard money: it solves for situations conventional lending cannot.
The property is the collateral. Hard money lenders need to know what it is worth now (as-is value) and, for renovation deals, what it will be worth after work is complete (after-repair value or ARV).
The lender's exposure is expressed as a loan-to-value (LTV) or loan-to-cost (LTC) ratio. Most lenders will fund up to 65-75% of ARV on fix and flip deals and 70-80% of as-is value on bridge loans. The property value determines how much leverage is available.
What gets scrutinized:
Even a good property in a bad deal structure gets declined. The numbers need to make sense:
If the deal math does not work, the loan does not get approved regardless of how strong the borrower is.
Hard money is not purely asset-based. The borrower matters.
Experience: Lenders tier their programs by borrower experience. A first-time investor may qualify for a lower LTC or face a higher rate than an investor with 10 completed deals. Some lenders require at least one completed transaction before they will fund.
Credit score: Most hard money lenders have a minimum FICO — commonly 620-660. Some lenders have no-credit programs with compensating factors. Better credit scores often unlock better programs.
Liquidity: Lenders want to know the borrower has reserves to cover carrying costs, overruns, and the loan payments if the project takes longer than planned. Showing up with no cash beyond the down payment is a red flag.
Background: Bankruptcies, foreclosures, and prior defaults are evaluated on a case-by-case basis. Recent foreclosures are disqualifying at most lenders.
The exit strategy is how the borrower repays the loan. Hard money loans are short-term — 12-24 months — so the lender needs to know how the loan gets paid off.
The two exits are sale (fix and flip) and refinance (BRRRR, construction-to-hold). A credible exit is supported by market data: comparable sales for a sale exit, rent comps and DSCR analysis for a refi exit.
"I'll figure it out" is not an exit strategy. Lenders underwrite the exit as carefully as the entry.
Every lender on Broker Cheetah has a verified credit box — deal types they fund, states they lend in, experience tiers, LTC limits, and credit minimums. When you enter your deal, you get matched to lenders whose programs actually fit your deal and borrower profile — not a list of lenders who might fund something vaguely similar.
The fastest way to get a hard money loan approved is to submit to the right lender the first time.
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