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Hard Money Loans in Sacramento
Sacramento's real estate investment scene moves quickly, with opportunities in everything from Midtown fixer-uppers to expanding suburban rental properties. Hard money loans provide the speed investors need when traditional financing timelines don't match market realities.
These asset-based loans focus on property value rather than borrower credit scores, making them ideal for Sacramento investors pursuing distressed properties, quick closings, or renovation projects. The loan is secured by the real estate itself, not your employment history or tax returns.
Sacramento County's diverse neighborhoods offer various investment strategies, from value-add multifamily in Oak Park to fix-and-flip opportunities in Land Park. Hard money financing adapts to these different approaches with flexible terms tailored to each project.
Hard money lenders evaluate your deal, not your W-2. They assess the property's current value, after-repair value, and your exit strategy. Most lenders require 20-30% equity in the property and want to see a clear plan for either refinancing or selling.
You don't need perfect credit or traditional income documentation. What matters is the property's profit potential and your experience level. First-time flippers can qualify but may face higher rates or additional requirements compared to seasoned investors.
Expect loan-to-value ratios between 65-75% of the property's current worth. Some lenders include rehab costs in the loan amount, advancing funds as work progresses. The property itself serves as collateral, simplifying the approval process significantly.
Sacramento has both local private lenders and national hard money companies serving investors. Local lenders often understand neighborhood-specific values better and can move faster on decisions, while national firms may offer more competitive rates for experienced borrowers.
Rates typically range from 8-15% with points charged at closing. Rates vary by borrower profile and market conditions. Terms usually run 6-24 months, giving you time to complete renovations and either sell or refinance into permanent financing.
Working with a broker who specializes in investor loans helps you compare multiple hard money options quickly. Different lenders have different appetites for property types, loan sizes, and borrower experience levels. Finding the right match saves both time and money.
The best hard money deals in Sacramento come from investors who know their numbers before applying. Calculate your all-in costs including purchase price, renovation budget, holding costs, and exit fees. Lenders want to see that you've left room for profit even if repairs run over budget.
Sacramento investors often underestimate the value of pre-approval. Getting your financing lined up before making offers gives you negotiating power and credibility with sellers. Many distressed property sellers prefer cash-equivalent offers that can close quickly.
Consider your exit strategy carefully. Will you sell after renovation, refinance into a rental loan, or use profits to fund your next project? Your planned exit affects which lender and loan structure makes the most sense. Some charge prepayment penalties while others encourage early payoff.
Hard money loans cost more than conventional financing but deliver unmatched speed and flexibility. While a traditional mortgage might take 30-45 days to close, hard money can fund in 5-10 days. This speed often makes the difference in competitive Sacramento investment markets.
Compared to bridge loans, hard money focuses more on the asset and less on the borrower's overall financial picture. DSCR loans work better for stabilized rental properties, while hard money excels for properties needing significant work or quick acquisition timelines.
For investors planning to hold properties long-term, starting with hard money then refinancing into a DSCR or conventional loan is common. This two-step approach lets you acquire and improve properties quickly, then lock in lower permanent rates once renovations are complete.
Sacramento's status as California's capital brings steady population growth and rental demand, supporting various investment strategies. Properties near light rail stations and downtown employment centers typically offer stronger exit opportunities, which lenders favor when evaluating deals.
Permit timelines and renovation requirements vary significantly across Sacramento County jurisdictions. City of Sacramento projects may face different inspection schedules than unincorporated county areas. Factor these timelines into your loan term selection to avoid costly extensions.
The Sacramento investor community is active and collaborative. Many hard money lenders here understand local contractor costs, permit processes, and neighborhood-specific renovation expectations. This local knowledge helps them underwrite deals more accurately and often more favorably.
Most hard money loans close in 5-10 business days once you have a purchase contract and property appraisal. Some lenders can move even faster for experienced investors with straightforward deals.
Many hard money lenders approve deals with credit scores as low as 600, or sometimes even lower. The property value and your equity position matter more than your credit history for most asset-based lenders.
Yes, most hard money lenders offer renovation financing that advances funds as work progresses. You'll need detailed contractor estimates and a clear scope of work during the approval process.
Most hard money lenders offer extensions for additional fees, typically 1-3 points plus continued interest payments. Plan conservatively and build buffer time into your initial loan term to avoid expensive extensions.
No, investors also use hard money for rental property acquisition, land purchases, and bridge financing. Any situation where speed matters or traditional financing doesn't fit can be appropriate for hard money.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.