Frequently Asked Questions
FAQs about Hard Money Loans
We are Here to Help You
Real estate investing can sometimes feel overwhelming. We field a lot of questions from real estate investors and we’ve listed the ones that we get asked the most. However, if you don’t see an answer to your question or you need additional information, don’t hesitate to contact us.
Hard Money Loans
Fix & Flip
What is a Hard Money Loan?
A hard money loan is a short-term, interest-only loan that is secured by the value of the property rather than the borrower. Real estate investors and developers commonly use these types of loans to fund their projects because they are easier and faster to obtain than traditional bank loans.
How Much Money Can I Borrow?
Our loan amounts vary depending on the project type. Typically, the ranges are:
- Fix and Flip Loans: $150,000 to $2,500,000
- Rental Property Loans: $150,000 to $2,500,000
- Commercial Loans: $250,000 to $4,000,000
What Does Loan to Value (LTV) Mean?
Loan to value (LTV) is the amount of money borrowed divided by the After Renovation Value (ARV). ARV is an estimated value of a property after renovations. Walnut Street Finance will typically lend up to 75% ARV for a project, depending on the property and the borrower.
What Does After Renovation Value (ARV) Mean?
After Renovation Value (ARV) is an estimated value of a property after renovations. Walnut Street Finance will typically lend up to 75% ARV for a project, depending on the property and the borrower.
What Does Loan to Cost (LTC) Mean?
Loan to Cost (LTC) is the loan amount divided by the purchase price and the cost to repair the property. Typically, Walnut Street Finance will loan up to 90% LTC depending on the project.
What Are Your Standard Loan Terms?
Each loan is customized based on your unique situation. There is no “one size fits all”. The real estate value, the cash you want to put down, your experinece and credit are part of what goes into determining the right terms for you. Click here for typical fix & flip loan terms.
What States Does Walnut Street Finance Lend In?
We currently lend and are experts in the following states:
- Washington, DC
How Important is My Credit Score?
We prefer our borrowers have a minimum credit score of 600. However, since hard money lenders loan money based primarily on the value of the property, we can be flexible during the approval process. We do consider borrower credit history and experience, but our loan programs are flexible enough to work with all borrowers who have a decent deal and borrower profile.
How Do I Apply For A Loan?
The process is very simple. Start by clicking on the “get pre-approved” button, or by calling us at 703-273-3500.
What Documents Do I Need to Get Started?
Each deal is different and but we generally require the property information to get started. From there, we will work with each borrower or company to put together a solution that best fits your project and situation.
How Long Does It Take to Close?
Pre-approvals can happen as quickly as 5 minutes and we can be prepared to close as quickly as 3-5 days. It helps to close quickly if the borrower has title and settlement company already.
Can I Roll Closing Costs Into the Loan?
We pride ourselves on requiring minimal cash down from the borrower so we finance all your closing costs and points. To add to that, we also have an option to set up interest and construction reserves so that you’re not making monthly payments during the first 6 months of the project.
Can I Get a Hard Money Loan to Renovate My Primary Residence?
No, we only fund real estate investment properties. We cannot finance owner-occupied or primary residence renovations and construction.
Can You Extend the Term of My Loan?
Yes. Sometimes projects have permit or construction delays and take more time than anticipated. We can extend the term of the loan if necessary.
Do You Have Prepayment Penalties?
There is no “penalty” and we encourage our borrowers to finish their projects faster than their projected timelines. The faster they finish, the bigger the potential ROI. However, if a loan is paid off within the first three months then the borrower is required to pay up to three months worth of interest payments.
What Types of Projects/Properties Do You Finance with Fix and Flip Loans?
We finance the following project types with our fix and flip loan offerings:
- Single-family Residential
- 2-4 Unit Residences
- Multi-family Apartments
- Mixed-use Buildings (min. 50% residential)
- Small Balance Commercial
(must not be owner-occupied)
Do You Provide Hard Money Loans for Commercial Projects?
We finance the following project types with our commercial loan offerings:
- Light Industrial
Best Hard Money Loans
Quick response makes all the difference to keep your project on schedule.
- Fast approval
- Fast closing
- Fast draws
We get it. Projects never go exactly as planned. We are here to help you.
- Local market experts
- 30+ years construction experience
- Your success is our success
Cash flow is critical on your projects. Our loan terms are set with your needs in mind.
- Minimal cash down
- No interest payments up to 6 months
- No need for perfect credit
Fix & Flip
Found a property that you want to rehab and sell for your next project? A fix and flip loan is right for you. A lump sum is usually paid at closing to purchase or refinance the property, with the rest of the loan paid as you reach construction milestones.
Have you identified a real estate investment opportunity for your next project but don’t have enough cash? An acquisition loan helps you buy a property, whether the plan is to resell it, renovate it and flip it, or develop it. Let us help you get the deal!
Are you cash-strapped between projects, or need funds to snap up another deal before it gets away? Bridge loans can “bridge the gap” and help you purchase another property by leveraging non-owner occupied real estate you already own.
Areas We Serve
Hard Money Loans for:
Hard Money Private Loan vs Traditional Bank Loan
|Hard Money Loan||Traditional Bank Loan|
|Can close in days||Speed||30-45 days to close|
|Minimal||Paperwork||Bank regulations & checklists|
|Borrowers qualify based on project and equity. Less than perfect credit does not disqualify.||Qualifications||Qualification often not possible for renovation projects. Borrower credit score weighed heavily.|
|Flexible rates and terms are available and designed around project and borrower||Flexibility||Set loan rates and terms|
“Extremely glad we went with this lender. They are not just a lender but a fabulous resource as well. They have provided a wealth of information on renovations from vendors to agents that are top notch in this market. They are interested in the success of their clients and I have been able to call them or email them with questions. I always get a quick and informative response. No other lender wants to help you like this one. Use them.”
"Walnut Street Finance has been a great partner to work with for my real estate investments. I’ve worked with Walnut Street on multiple projects and they’ve given me solid advice with questions on permits and inspections as well as quality referrals for contractors."
“Walnut Street Finance was referred to me by my Mortgage lender. They are fast, attentive, and have an amazing staff. I used WSF for a recent flip project, Melissa came out to the property to check it out and make sure it would be a good deal. After the renovations, it sold in 4 days with multiple offers for full list price. I am already working with them again on another project, they are great to loyal clients."
“When no one else wanted to take this adventure with us, Walnut was there, as excited as we were about our project. They went above and beyond to help us out and we will forever be grateful for their confidence in us.”
About Walnut Street Finance
Before becoming a real estate private money lender, Walnut Street Finance spent twenty years as a builder and developer. We understand your project needs because we’ve been there. Our streamlined process is fast and easy, and we will help you every step of the way – with the loan process, at the closing table, and all the way to the day you sell or refinance your property and start your next project! All of this saves you time and money.
We offer private money loans from $150,000 to $2.5 million. Experts in Washington DC, Virginia, and Maryland.