Hard money loans are a quick, versatile source of financing for property investors and developers who require quick access to money and might not qualify for traditional financing. These loans close as quickly as 7–10 days, much faster than a conventional bank financing's process, so speed can become a competitive edge in heated markets.
The average hard money interest rates sit at 10–12%, as opposed to 6–7% with traditional lenders. Loan sizes range from $300K–$500K on residential flips, averaging $411K across private loans in late 2024. These conditions demonstrate why hard money loans are still a default option for borrowers who require quick, short-term funds.
Paperwork might not be the most exciting aspect of your role as a broker, but in the case of hard money loans, presenting the proper documentation is everything. It can be the difference between closing a transaction quickly or losing it. To get through the approval process quickly, brokers need to show documents that represent the borrower's creditworthiness, feasibility of the project, and the value of the property. If you’re a broker navigating the paperwork for a client’s hard money loan, this guide outlines the loan documents required to secure approval.
As a third-party originator or wholesale partner, you’re the middleman between your investor clients and private lenders. Unlike banks—and even some direct hard money lenders—RCN Capital relies on brokers to:
Your perseverance translates into quicker closings—typically in 7–10 days—whereas conventional mortgages stumble along at a 4–6 week pace.
Below is the essential "paperwork for hard money loan approval"—by category and annotated with suggestions for your submission.
If the transaction involves a purchase, there must be a signed contract between seller and buyer. This demonstrates to the lender that the borrower is under contract.
Why it matters: Confirms the transaction terms, purchase price, and escrow deposit.
Tip: Ensure any contingencies (inspection, financing) align with your lender’s approval window.
Why it matters: Demonstrates borrower cash reserves to cover holding costs.
Why it matters: Verifies property value and uncovers liens or encumbrances.
Why it matters: Legally secures the loan against the property and outlines repayment terms.
Why it matters: Confirms borrower identity and legal structure.
Why it matters: Lays out the loan terms, LTV, and borrower details.
This document provides the foundational information a lender needs, including:
Tip: Fill in as many fields as possible to avoid back-and-forth.
Depending on deal complexity, lenders may request additional materials:
Purpose: For bridge or fix-and-flip loans covering rehab draws.
Purpose: Demonstrates repayment path—sale or refinance.
Purpose: Shows overall borrower stability and debt obligations.
With these figures, your neatly packaged submission can seal deals in a quarter of the time, equating to more money and happier clients.
In today's competitive real estate market, speed and accuracy are your best selling points. Equipped with this Hard Money Loan Application Checklist and market intelligence, you can:
Ready to get down to business? RCN Capital lends to real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate professionals. If you are looking to offer hard money programs to your clients, RCN Capital has competitive loan options and an award-winning broker referral program available to partners.