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Can I Get a Hard Money Loan Without Real Estate?

Getting a hard money loan without real estate is a rare situation, but it can be done when a borrower is pro-active and searches for a lender who will pre-approved an application before a piece of property is acquired. The application process needs to substantiate the borrower’s worthiness to repay the loan once a piece of property is located and bought. Hard money lenders are private individuals and companies with large amounts of funds available for investments that will return a good profit. Hard money lenders will charge a higher rate of interest and more points than conventional banking facilities. These loans are intended to be for a short period of time, generally from a few months to a few years, to enable the borrower to buy a piece of property, do any needed repairs, and resell it at a profit for both the lender and the borrower.

A hard money loan is not intended to be a personal loan and if the borrower wants to pre-arrange for a loan without current real estate, the loan will be made on the prospect of a future acquisition of property. The lender will want financial statements, tax returns, proof of cash savings and any retirement accounts. This information will help the lender to analyze the borrower’s capability to come up with any cash needed to cover any difference between the property’s purchase price and the amount of a hard money loan, typically between 50 to 70 percent of a property’s current resale value.

If approved, the buyer can get a letter of funds from a hard money lender, but the letter is not an assurance that there will be funds actually available once the buyer finds a good real estate deal. The lender will make the final decision based on the current value of the real estate, the property value of other homes in the neighborhood, and the resale activity in the local area. A borrower needs to find a lender who will agree to a hard money loan without collateral in a piece of current real estate.

Borrowers can ask mortgage brokers for referrals to private investors. Borrowers can view the following websites of hard money lenders and fill out any application requirements to explain their unique situations. Interested lenders will get back in contact with an applicant.


This article contains general legal information but does not constitute professional legal advice for your particular situation. The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.