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Hard Money 101
Hard money is typically used for short-term real estate projects that last from a few months to a couple of years. 
A hard money loan is an asset-based loan with a higher interest rate than conventional loans and shorter repayment terms. These loans are typically used for rehab to a property. The loan amount is based upon a ratio of the loan amount divided by the current value of the house. Most hard money lenders will lend up to 75% of the property’s current value. 
The term “hard money” was coined in the 1950’s when the credit industry made major changes. Hard money was considered a last resort for many property owners seeking capital in their real estate properties. Hard money lenders are not required to follow strict FDIC regulations. Since 2009 and the passing of the Dodd-Frank Act, the hard money loan market has considerably increased. The Dodd-Frank and Truth Lending Act put major regulations on banks for approving mortgages. 
A hard money lender will determine the value of a property through a broker price opinion (BPO). Sometimes a lender will use a licensed appraiser to get the value of the property. Different lenders handle things in different ways.
Why Are People Using Hard ... more

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