Hard Money Experts

Long Term Hard Money Loans Up To 30 Years

In addition to offering short-term financing for fix and flip deals, rehab situations, and short-term holds, many hard money lenders also offer long-term financing. Due to the additional risk, in many cases, the lending standards for long-term hard money loans may be stricter than for shorter-term loans. For instance, lenders may require a certain credit score, or even past real estate investing experience. However, in general, long-term loans from hard money lenders have significantly lower rates than traditional hard money financing. In fact, some lenders offer loans at interest rates as little as 3.75%, though this is the exception, not the rule.

• Loan Term: Up to 30 years

• LTV: 80% LTV (sometimes more)

• DSCR: 1.0x minimum

• Interest Rate: 3.75-7.5%

• Origination Fees: 2-6%

• Credit Score: Generally required, with a minimum score of 600. Some lenders may require up to 680.

• Appraisal: Required before funding. 

• Closing Timeline: Some lenders close in as little as 24 hours, while others may take between 3-4 weeks to close.

Pros:

• Loans are often fully amortizing, meaning the borrower does not have to refinance for the life of the loan.

• Significant leverage is offered, often up to 80%.

• Sometimes available for rehab properties post-rehabilitation.

• Often have significantly lower interest rates than most hard money loans.

Cons: 

• Generally requires a strong credit score of 600-680+

• Real estate experience may be required.

• Loan origination fees are still high, often between 2-6%.

• Loans are full-recourse.

Hard money loans can be great for a wide variety of situations, but they are often best when an investor has found an undervalued or foreclosed property. The investor can either rent the property as-is, or invest additional funds in rehabbing the property.

Either way, the investor will generally want to sell the property when it has significantly appreciated. However, real estate markets are hard to predict, and significant appreciation can take a long time.

This is why long-term hard money loans can be ideal, as they allow the investor to wait as long as they need to for the property to appreciate before selling. In contrast, short-term hard money borrowers often need to “time the market” to make sure they get a profit from each deal. If the housing market crashes, that could leave an investor in a sticky situation.

For example, let’s say an investor buys a home at $200,000, significantly under its market value of $250,000. They use a long-term hard money loan at 80% LTV ($160,000), and rent the property for $1400/month. With a 30-year amortization, this loan would have a monthly principal and interest (P&I) payment of around $860/month.

Therefore, excluding taxes and insurance, the investor would profit $540/month, or $6,480/year, while building equity in the property. With an average real estate appreciation of 6% per year, the property would be worth around $450,000 ten years later, which would allow the investor to make a significant profit if they decided to sell it.

Unfortunately, there are far fewer hard money lenders offering long-term hard money loans than those offering traditional, short-term hard money financing. However, this doesn’t mean that it isn’t available. Some of the best-known lenders offering 30-year hard money loans include:

1. Investmark Mortgage

Investmark Mortgage is an Addison, Texas-based hard money lender. The company has locations in Dallas/Fort Worth, San Antonio, and Houston. Their 30-year mortgage program terms include:

• Loan Size: $55,000 to $1 million+

• LTV: 80% maximum LTV

• Term: 1,2, or 5-year interest-only or 30-year fixed

• Closing Timeline: Less than 3 weeks

• Income Verification: Not required

• Cash-Out Refinance: Available for qualified borrowers

2. Socotra Capital

Socotra Capital is a Nevada-based direct hard money lender which provides financing for a wide array of property types, including special purpose properties, churches, vacant buildings, cannabis facilities, dilapidated properties, and unqualified real estate. Like Investmark, they have a popular “Buy and Hold” loan program with terms up to 30 years.

3. Alta Capital Group

Alta Capital Group is a Tustin, California-based direct private money lender. They offer a variety of loan programs, including rehab loans, bridge loans, and new construction financing. Terms for their long-term rental loan program range up to 30 years and include:

• Loan Size: $100,000 – $2 million

• LTV: 80% maximum LTV

• DSCR: 1.0x DSCR

• Term: 30-year fixed

• Interest Rate: Starts at 3.75%

• Owner-Occupied Properties: Not permitted

• Property Types:

  • Single-Family

  • 2-4 Unit Multifamily

  • 5-20 Unit Multifamily

  • Business Property

  • Condo

  • Mixed-Use