Asset-based, short-term capital — usually for value-add residential.
A hard money loan is a short-term, asset-based real estate loan secured by the property itself — not by the borrower's credit or income. "Hard" refers to the hard asset (the property) that collateralizes the loan. Hard money is the dominant financing tool for fix-and-flip, value-add residential, and time-sensitive acquisitions where speed matters more than rate.
The defining feature of a hard money loan is that the lender underwrites the deal, not the borrower's personal financials. Tax returns, W-2s, and DTI ratios aren't the focus — instead, the lender focuses on the property's as-is value, the rehab scope, the ARV, and the operator's track record. That's why hard money is the right tool for self-employed investors, deals with timing pressure, and properties that don't fit conventional underwriting (vacant, distressed, mid-rehab).
Hard money is short-term by design — typically 6 to 18 months, with interest-only payments and a balloon at maturity. Rates run higher than conventional financing (8–12% on residential, 10–14% on harder commercial deals), and origination fees are usually 1–3 points paid at closing. The math has to work on the deal: a fix-and-flip that nets 25–35% gross profit can easily absorb hard money pricing.
The other defining feature is speed. A hard money loan can close in 7–14 days with clean docs, and many programs will fund within 5 business days on repeat operators. That speed is what wins deals at auction, off-market, and on competitive listings — a buyer who can close in 10 days frequently beats a higher offer that needs 45 days of conventional underwriting.
Hard money is sometimes used interchangeably with "private money" — both refer to non-bank, non-conforming real estate loans secured by property. The historical distinction was that private money came from individuals (a wealthy friend, a self-directed IRA) while hard money came from firms with institutional capital. Today, both terms describe the same market, with Matrix and other private capital lenders being modern, programmatic versions of historic hard money.
| Purchase price | $165,000 |
| Rehab budget | $55,000 |
| ARV (After Repair Value) | $320,000 |
| Hard money loan: 90% purchase + 100% rehab | $203,500 |
| LTARV check: $203.5k ÷ $320k | 63.6% ✓ (well within 75% cap) |
| Rate / term | 10.5% interest-only / 12 months |
| Closing in | 10 business days |
In practice, today the terms are interchangeable — both refer to non-bank, asset-based real estate loans. Historically, "private money" implied an individual lender and "hard money" implied a firm. Most modern private capital lenders (including Matrix) operate programs that fit either label.
Most hard money programs have a soft credit floor in the 620–660 range, but the credit pull is often more of a check on bankruptcies and recent late payments than a true qualifying gate. The deal qualifies first; credit is secondary.
The lender holds back the rehab portion of the loan and releases it in 3–6 draws as work is completed. Each draw is requested by the borrower, inspected (usually by a third-party inspector), and released to reimburse work that has already been done.
Yes — that's the standard exit. Once the property is rehabbed and either rented (BRRRR) or stabilized, the borrower refinances into a long-term DSCR or conventional loan, or sells the property. Hard money is designed to be transitional.
Usually minimal — most hard money loans have either no prepay or a short 3–6 month interest minimum. The lender is pricing for short hold periods, not locking in years of interest.
Matrix funds hard money loans on fix-and-flip, value-add residential, and time-sensitive acquisitions. 7–14 day close. Asset-based underwriting. Designed for active operators.
