Best Hard Money Lenders 2017: LendingHome vs. Patch of Land vs. Lima One Capital
Hard money lenders offer short-term loans to quickly facilitate the purchase and renovation of residential and commercial properties. With more than 600 hard money lenders in the U.S., it’s hard to find a reputable lender that’s right for you. To help, we looked at a range of hard money lenders and found that LendingHome, Patch of Land, and Lima One Capital offer the best mix of options for hard money loans.
Best Hard Money Lender 2017: LendingHome
LendingHome is our top pick because they offer loan amounts up to 90% loan-to-value (LTV), up to 75% after-repair-value (ARV), and have interest rates starting as low as 7.5%. Further, LendingHome charges only a small amount of lending fees (between 1.5% 2.5%), and they conduct their own appraisals at no additional cost to the borrower. These terms make them a good option for small businesses.
Hard Money Lenders Comparison Table: LendingHome vs. Patch of Land vs. Lima One
*Last Updated: November, 2017
Best Hard Money Lender 2017: LendingHome
LendingHome is a national hard money lender that finances residential real estate such as single-family homes, multi-unit properties, apartments, and condos. We chose them as the best hard money lender because they offer comparatively high maximum loan amounts and offer comparatively low interest rates and lender fees.
LendingHome can finance residential properties in both good and poor conditions. For a property in good condition, LendingHome issues a loan up to 90% of its loan-to-value (LTV) ratio, which is equal to 90% of its purchase price. This represents the highest LTV on our list.
For a property in poor condition, LendingHome issues a loan up to 75% of its after-repair-value (ARV) ratio, which is equal to 75% of the expected fair market value (FMV) of the property after renovations. This represents the highest ARV on our list.
For both LTV and ARV, LendingHome offers low interest rates starting at 7.5%, which is low compared to industry averages. However, it’s not uncommon to receive an interest rate between 9% 12%. LendingHome also charges lender fees between 1.5% 2.5%, which is the least expensive option when compared to Patch of Land, tied with Lima One.
However, the downside to LendingHome is that they only finance short-term residential real estate. If you’re looking for more permanent residential loan options then Lima One Capital is right for you. If you’re looking to finance commercial spaces, it’s best to look at Patch of Land, which issues hard money loans for both residential and commercial real estate properties.
Hard Money Lender with Fastest Funding: Patch of Land
Patch of Land is a national hard money lender that finances both residential and commercial real estate. The lender issues loans on single-family homes, multi-unit properties, apartments, and condos, as well as mixed use buildings, offices, and shopping centers. Patch of Land is our top pick for those in need of the quickest financing.
This is because Patch of Land, similar to both LendingHome and Lima One Capital, offers prequalification that takes only a few minutes. However, while LendingHome and Lima One rely on crowdfunding to finance their loans, Patch of Land prefunds their loans, speeding up the crowdfunding process.
It can take a borrower as little as 5 days to receive the funds from a hard money loan with Patch of Land, and the average time to funding is 7 days. This is in contrast to LendingHome and Lima One Capital, both of which take around 10 15 days to finance an approved loan.
Even though the time to funding is the best, it should be noted that Patch of Land requires more up-front information during prequalification. It’s best to already have all the necessary documents prior to applying, which we talk about more in-depth below. Further, Patch of Land offers a lower residential LTV ratio, ARV ratio, and a higher interest rate and fees when compared to LendingHome.
Best Hard Money Lender with Permanent Loan Options: Lima One Capital
Lima One Capital is a national hard money lender that finances both short-term and permanent residential real estate projects. The lender offers short-term fix-and-flip and bridge loans for single-family homes, multi-unit properties, apartments, and condos. They’re also the only hard money lender on our list that also offers a 30-year mortgage for rental properties.
Their permanent mortgage can be used for a single, non-owner occupied rental property as well as for a portfolio of single family rental units. The permanent rental mortgage can have both a 30-year fixed or variable interest rate that starts as low as 4.99% for variable rates and 6.99% for fixed rates. The loan rental loan can range from $50k $5mm+, have an LTV of 75%, and don’t finance repairs.
This is the only permanent loan option on our list of the best hard money lenders. However, Lima One Capital also offers short-term fix and flip loans for multi-unit properties between 1 4 units as well as apartments of 5+ residential units. Their fix and flip options include loans for 90% of purchase plus rehab costs, 70% of the expected loan-to-value, as well as construction financing and cash out refinances.
Overall, Lima One Capital offers the most loan options out of the three lenders on our list. Specifically the lender can originate the following types of short-term and permanent mortgages:
- Fix and flip loans (rehab, cash out refinance, construction)
- Multifamily loans
- Rental bridge loans
- Permanent rental loan (single-family, portfolio)
By comparison, LendingHome doesn’t originate permanent rental loans and instead focuses on fix-and-flip loans based on LTV or ARV. Patch of Land also doesn’t offer permanent loan options. However, Patch of Land is the only lender on our list that originates hard money commercial loans.
In-Depth Review of Hard Money Lenders: LendingHome vs. Patch of Land vs. Lima One Capital
Types of Properties
Hard money lenders may fund both residential real estate and commercial real estate, or they may stick to just one or the other. Hard money lenders that finance residential properties typically fund single-family homes, multi-unit buildings, apartments, and condos.
Hard money lenders that finance commercial properties typically fund mixed use buildings, offices, and shopping centers. These loans are often used to finance rehab projects or when flipping houses. Let’s take a deep dive into the types of properties that each of our top hard money lenders finance.
LendingHome offers hard money loans on residential properties only. Specifically, the hard money lender funds: