The hard money mortgage lending world for single family homes (1-4 units) is broken into two categories – owner occupied and non-owner-occupied loans. All hard money lenders will finance non-occupied properties, as long as the loan to value is reasonable, title is clear, and there is a viable exit strategy. It is the owner-occupied loans that are more complicated to place.
In order to finance owner-occupied home loans, borrowers must meet certain criteria of fico scores, income documentation, asset documentation and more. The purpose for these loans is described as “personal, consumer, or household use”. These are typically reserved for conventional bank loans, unless borrowers do not meet the Fannie Mae or Freddie Mac mortgage guidelines.
Alternatively, there are owner-occupied loans for business purpose as well. These are loans where most of the money is going for a business consideration, such as a funds for a new office purchase, business equipment, or even business debts. Most hard money lenders will do these loans, because they are considered “business purpose loans”. They do not have to meet the stringent guidelines like the personal consumer loans do.
The difference – beside the purpose of the loan – is that the hard money lender will charge more, require a higher rate, and shorten the term of the loan – less than 3 years for most loans. These are interim or “band-aid” loans and not long-term solutions.
At Cushner Capital Group, we do both types of owner-occupied type loans – consumer and business purpose! We even do seconds for both!
We realize that most folks do not own rental properties but may have a need to finance or refinance their personal home. Sometimes banks will deny a good borrower. If that is the case, please call us at (760) 845-9035. We can help in many instances.
So, whether it is a business purpose to buy more widgets for your widget company, or funds for a child’s education or debts, or a move up or down in size, call us.