Fifty-four answers from the underwriting desk.

A hard money loan is a short-term real estate loan secured by the property itself rather than by the borrower’s income or credit history. Hard money lenders care about what the property is worth today, what it’ll be worth after rehab, and how quickly you can sell or refinance.

The trade for that speed is rate: hard money typically prices at 8.99–12% APR with 1–3 origination points, vs 6–7% for a 30-year conventional. Banks underwrite people; hard money lenders underwrite deals.

A private money loan is real-estate-secured financing from a private lender (often called a hard money lender) rather than a bank. Private money loans are underwritten primarily on the asset and the sponsor’s track record, close in days rather than weeks, and are designed for investment use cases — fix-and-flip, ground-up construction, bridge financing, and DSCR rentals.

They are the same product family. “Private money” is the broader category — any non-bank capital, including a friend who lends out of an SDIRA. “Hard money” is the asset-based, short-term subset built for speed. In practice the terms are used interchangeably.

The distinction matters when comparing relationship-based capital against an institutional private lender like PML. PML is a private money direct lender — same product class with a transparent rate sheet, in-house underwriting, and a single underwriter from quote through final payoff.

Sometimes. A relationship-based private money loan from someone you know well may have no points and a slightly lower rate. But for a typical arm’s-length transaction, the two are similarly priced. Compare total dollars, not rate alone.

In many states, yes — under NMLS for residential investor loans, or as a commercial mortgage broker/lender. Licensing requirements vary widely by state. Confirm a lender’s license in the state where the property sits before you wire any funds.

Yes — self-directed IRAs and Solo 401(k)s can be the lender of record on real estate loans. Consult an SDIRA custodian to avoid prohibited-transaction issues.

Yes, and many investors do exactly this. Use a relationship-based private loan to close fast on day one, then refinance into a structured hard money or DSCR loan once title is clean.

Most hard money lenders run a soft credit pull but the focus is the deal, not the score. PML’s minimum FICO is 660 on bridge, fix-and-flip, and construction loans; 680 on DSCR. The strongest pricing kicks in at 720+. Below 600 narrows options sharply; below 580, most lenders pass.

Most won’t, since hard money lenders typically don’t report to consumer credit bureaus the way conventional mortgages do. Confirm with your lender if reporting matters to you.

Generally no. Hard money lenders almost always restrict loans to investment property only — both because of state and federal consumer-lending rules and because the underwriting model assumes a non-owner-occupied use case.

Usually yes, but the appraisal can be expedited (a desktop or hybrid appraisal that takes 24–48 hours instead of 3–4 weeks) and is sometimes waived for repeat borrowers on properties under a certain threshold.

Interest-only monthly during the term, principal as a balloon at maturity. Most fix-and-flip loans are paid off when the property is sold; bridge loans are paid off by a refinance into a long-term loan such as a DSCR rental loan or a conventional mortgage.

A clean cash-out refinance can wire in 48 hours. Purchase bridges typically close in five to seven business days. Ground-up construction loans close in 10 to 14 calendar days from a complete submission. The variable is title and entity work in the property’s jurisdiction; underwriting is rarely the bottleneck.

All 50 states. We close title and entity work in-house in 28 states; the remaining states route through partner title agents we work with on a recurring basis.

No. PML never charges an application fee on any loan product. We pull a soft credit inquiry only after you accept indicative terms, and origination points are paid at close out of loan proceeds.

Three reasons: short term means higher operational cost per dollar lent, distressed property has higher loss-given-default risk, and speed-to-close requires capital availability that costs more than 60-day-locked capital.

They shouldn’t, on a flip product. PML fix-and-flip loans carry zero pre-payment penalty — sell on day 31 or day 360, you pay interest only for the days you held the loan. A 6-month minimum interest is a flag — it converts a flip loan into something more like a mid-term real estate loan.

Most fix-and-flip rates are fixed for the loan term. A few lenders index to SOFR or prime; if yours does, ask what the rate cap is.

Lender by lender. PML repos our rate floor monthly; some lenders adjust weekly with Treasury moves; others hold quarterly. Our current floor is 8.99%.

Generally no. Hard money loans are deal-specific. You can get pre-qualified and lock the actual rate when you have a property under contract.

A fix-and-flip loan is short-term (6–18 months), interest-only, secured by a non-stabilised asset. A DSCR loan is a 30-year rental loan that qualifies on the property’s rental income, not your tax returns. Many investors use both in sequence (BRRRR) — flip loan in, DSCR refinance out.

Yes. We actively lend to first-time flippers. Expect to bring 15–25% of total project cost, a slightly higher rate (about 100–150 bps), and a tighter rehab budget. Your second loan prices materially better.

Almost never. “100% financing” pitches usually mask the down payment elsewhere. For a real fix-and-flip loan, plan to bring 15–25% of total project cost as a first-timer.

Most lenders prefer an LLC. Personal-name closings exist but are limited. A single-member LLC takes 30 minutes to set up.

Three to five completed flips in the last 24 months is the typical threshold for top-tier pricing. Material rate improvement starts after your second completed flip. PML re-underwrites the relationship after every closing — not just the next deal.

Many lenders won’t fund a fully DIY first flip. A licensed contractor for trade-licensed work (electrical, plumbing, HVAC, roofing) gives lenders the comfort to fund.

Typically $75,000 – $100,000 minimum, with some lenders going as low as $50,000 in select markets.

Yes, on tier-1 sponsors with three or more closed flips in 36 months. The rehab budget funds via weekly draws as line items are completed. On tier-2 and first-time flippers, rehab funding is 90–95%, with the balance posted as a holdback at close.

Yes — that is the BRRRR exit and the most common path through our book. Borrowers refinancing from a PML fix-and-flip loan into our DSCR rental loan face no seasoning requirement and often no second appraisal. Same underwriter team, expedited title.

Empirical convention. The 30% buffer reliably covers financing, holding, selling, contingency, and profit on most flips between $150K and $500K ARV. Above $750K ARV, 72–75% can pencil; below $200K ARV, 65–67% is safer.

The math: Maximum Offer = (70% × ARV) − Repair Cost. Two inputs, one operation, conservative enough to be right ~80% of the time.

Approximately yes — with a different exit. BRRRR investors typically target 75% LTV-ARV on the refinance and use the 70% rule as their entry screen.

Different products. The 70% rule is a fix-and-flip resale screen — max offer = (0.70 × ARV) − repair cost. The 1% rule is a long-term rental cash flow screen — monthly rent should be at least 1% of total purchase plus rehab cost.

Sometimes you can stretch to 72–75% because there are no financing costs. But the other 30% items still apply (holding, selling, contingency, profit). Stay close to 72%.

Walk away or wait. There’s always another deal; the 70% rule is a discipline, not a negotiation tactic. Many deals come back to flippers 60–90 days later.

DSCR (debt-service coverage ratio) is the ratio of a property’s gross rental income to its proposed PITIA (principal, interest, taxes, insurance, association). PML rental loans qualify on the property’s DSCR, not on personal income.

Minimum DSCR is 0.75× with a rate adjustment; premium pricing kicks in at 1.20× and above. The headline benefit: no tax returns, no W-2s, no employment verification.

Most lenders accept 0.75 with a rate add and reduced LTV. PML’s program goes to 0.75 with a 50–125 bp rate add and a lower LTV cap. Below 0.75, options narrow significantly.

Most do — typically a step-down structure (5/4/3/2/1) over the first three to five years. No-prepay options exist with a rate add of about 25–50 bps.

Yes. PML’s STR DSCR uses 12-month documented platform income (AirBnB, VRBO) at 75% of gross, or AirDNA submarket estimates when the asset has fewer than 12 months of history. STR LTVs are typically 5 percentage points lower than long-term DSCR.

Most lenders cap a single borrower’s DSCR portfolio at 10 properties; some go to 20 or have no cap with portfolio-level review. Multiple lenders can be stacked.

PML’s DSCR minimum is 680. The strongest pricing usually requires 720+. Below 660 most lenders pass; below 620, virtually all do.

3 months of PITIA on your first DSCR loan; 6 months thereafter. Reserves can sit in checking, savings, money market, or up to 70% of retirement-account balances.

SFR 1–4 units, townhouses, condos (with HOA review), 5–9 unit multi-family, and short-term rentals. Most DSCR lenders won’t accept:

• Condotels
• Non-warrantable condos
• Manufactured / mobile homes
• Properties on trust land
• Working farms

Yes. Lot acquisition and construction close as a single facility, drawn against a combined budget. There is no two-step refinance once permits are pulled.

Submit a draw request with paid invoices and a percent-complete summary. We dispatch a third-party inspector within one business day; once the inspector clears a line item, the wire goes out within 48 hours. There is no first-draw audit before construction begins — the interest reserve funds your work until the first true draw.

Yes, with a licensed general contractor on the deal and a credible construction budget. First-timers will see slightly tighter leverage (typically 80% LTC instead of 90%) and a 25–50 bp rate adjustment. After the first completed project we re-underwrite the relationship, not just the next deal.

It means PML funds the full construction budget through weekly draws. Your equity sits in the lot acquisition and any over-budget items. Above 90% loan-to-cost we may require a higher origination or a personal guarantee, but the construction budget itself is fully funded.

Dutch interest charges interest on the full loan amount from day one — including the rehab portion you haven’t drawn yet. Non-Dutch interest charges interest only on the funds you’ve actually drawn. The difference can change your true cost of capital by 1–3% on a typical fix-and-flip.

PML uses non-Dutch on rehab and construction draws. Read the full guide with worked math →

No. Bridge loans are interim financing, not construction lines. If your project requires drawn capital for construction or rehab, refinance into our construction loan or fix-and-flip loan instead.

Three-month minimum interest is standard, then zero pre-payment penalty after month three. Sell on day 91 with no penalty; sell on day 60 and you owe interest through day 90.

660 on a tri-merge for fix-and-flip, bridge, and construction loans. 680 on a tri-merge for the DSCR rental product. Soft pull only until indicative terms are accepted.

On most products, yes. Bridge, fix-and-flip, and construction loans are typically full-recourse with a sponsor personal guarantee. Stabilised multi-family at qualifying loan size and DSCR can be structured non-recourse on a case-by-case basis.

For construction and rental loans, yes — though we accept desktop appraisals on smaller deals or strong sponsors. For fix-and-flip we order a subject-to-completion appraisal that values the asset as-built. The appraisal does not gate funding — it gates the upper bound on leverage.

Get pre-qualified at /pricing in about 60 seconds. We’ll review your credit, reserves, and borrower box and give you an indicative rate range. No hard credit pull at this stage — soft inquiry only after you accept indicative terms.

For an indicative quote: the property address, scope of work, and your FICO range. That’s it — about 60 seconds at /pricing.

For closing, expect to provide:

• Government-issued ID
• Two months of bank statements (asset verification, not income)
• Entity formation docs (LLC operating agreement, EIN, articles)
• Schedule of real estate owned (REO)
• The property purchase contract or refi pay-off statement
• Insurance binder before close

Tax returns are not required on DSCR or asset-based products.