What are the characteristics of a hard money loan, when do they make sense for borrowers, and why are they called “hard?”
"硬通货 "贷款有哪些特点，对借款人有哪些意义，这种贷款为什么能被称为 "硬通货"？
Objectives
- Dispel the myth of why it’s called “hard” money.
- Learn what characteristics are typical of hard money loans.
- Consider situations when hard money loans make sense.
概括全文
- 揭开 "硬通货 "的神秘面纱。
- 了解硬通货贷款的典型特征。
- 考虑在哪些情况下硬通货贷款有意义。
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What puts the “hard” in hard money? A common misconception is that hard money loans are described as hard money because of their relatively high cost, at least in comparison with conventional loans. In point of fact, hard money is a reference to physical assets, and more often than not, the hard asset of choice is real estate.
Think Like a Hard Money Lender
Hard money lenders decide whether or not to originate a loan based almost exclusively on the quality or the potential of the real estate. Any consideration given to the credit quality of the borrower is secondary at best, a very distant second. The hard money lender’s logic here is binary, considering only two possible outcomes. If things go as expected, which is preferable, the borrower will pay me back as agreed. On the other hand, if the borrower defaults, I’ll foreclose on the property and sell it. Either way, I’m covered. I’m going to make a profit on my investment.
What Are Hard Money Loans?
Hard money loans are generally short-term loans, typically lasting from six months to three years. They’re used primarily by real estate investors and developers when they must act quickly on an opportunity or when conventional lenders aren’t willing to provide the needed financing. Their objective may be to acquire the property quickly with a hard money loan and then refinance into a conventional loan. Maybe they’re going to acquire and rehab the property with the intention of selling it – a fix-and-flip – or maybe they’re funding a ground-up construction project, again with the intention upon completion of either refinancing into a conventional loan or selling it.
The key here is that hard money loans are not long-term financing. The borrower’s got a business plan they’re going to see through to a successful conclusion in relatively short order. They need the money now and their plan will enable them to pay it back soon. In a nutshell, that’s the reason hard money loans exist.
Three Ways Hard Money Saves the Day
Hard money lenders are an alternative source of funding for borrowers who cannot obtain the loans they need from traditional sources like banks. There are generally three situations when this may be the case.
- The borrower may be under a time constraint. Hard money loans are often approved in days, if not hours, while conventional financing can take weeks or sometimes even months to process due to more stringent underwriting requirements.
- The borrower may have credit issues. Hard money loans are based primarily on the value of the property, so credit scores and financial history are less important. Hard money lenders are more likely to work with borrowers who have poor credit or otherwise do not meet the strict guidelines of traditional lenders.
- The collateral or the project doesn’t fit in a conventional lender’s credit box. Banks typically have certain criteria they apply to every prospective real estate loan, such as acceptable property types, locations, and occupancy rates, as well as more technical considerations such as loan-to-value and debt-service coverage ratios. If you’d like to take a deeper dive into LTV and DSCR, watch our video on these topics. They’re the primary measures used by lenders to gauge their exposure to risk when underwriting loans for investment properties.
When the Bank Says, "It Just Doesn't Fit"
Elaborating on that last point, those underwriting criteria, when taken in their entirety, are what bankers refer to as their credit box. It’s a metaphor that basically represents their appetite for risk. They’ve spent a lot of time thinking about it, held countless meetings to discuss it, compared it against banking regulations, and juxtaposed it with the need to provide returns to their investors. Once it exists, things become very black and white. If a deal doesn’t fit in their credit box, sorry, it’s a pass.
Even though you’re always going to pay more for a hard money loan, there are situations where it not only makes sense – where it pencils – but is in fact the one and only way to make a deal work. In those cases, it’s a no-brainer. There’s nothing hard about that.
"Hard Money Loans"是指一种由私人或私人机构提供的高风险、高利率的短期贷款。这种贷款通常不依赖借款人的信用状况，而是以抵押品（如房产）作为贷款的担保。由于这种贷款通常用于购买投资房地产或进行房地产交易，因此有时也被称为"房地产投资贷款"。因为Hard money loans包含一个“Hard”, 常见的误解是认为这是因为与传统贷款相比相对较高的成本。事实上，"Hard"是指实物资产，而且通常情况下，就是房地产。
像硬通货贷款人那样思考
Hard money loans贷款人是否贷款完全基于房地产的质量或潜力，对借款人的信用质量的考虑是次要的，甚至是非常次要的。Hard money loans贷款人在这里的逻辑是二元的，只考虑两种可能的结果。如果事情按预期进行，也就是最理想的情况，借款人会按约定还款。另一方面，如果借款人违约，贷款人将会对该房产进行抵押并出售。无论哪种情况，贷款人都有保障并从投资中获利。
什么是硬通货贷款？
Hard money loans通常是短期贷款，通常持续时间为六个月到三年。主要由房地产投资者和开发商使用，当他们急需使用资金，或传统贷款机构不愿提供所需融资时。他们的目标一般是通过Hard money loans快速购买房产，然后再融资成传统贷款。也许他们打算购买和翻新房产，然后出售（买-修-卖），或者他们出资投入一个刚起步的建筑项目，同样的，完成后可能会再融资成传统贷款或出售。
关键在于，Hard money loans不是长期融资。借款人有自己的商业计划，他们将在相对短的时间内成功实现。他们现在需要资金，并计划很快偿还贷款。简而言之，这就是Hard money loans存在的原因。
硬通货起作用的三种方式
对于无法从传统渠道（如银行）获得所需贷款的借款人来说，Hard money loans是一种替代的融资来源。一般情况下，这可能有三种情况：
首先，借款人可能面临时间压力。相对于传统融资需要几周甚至几个月的处理时间，Hard money loans通常在几天内甚至几小时内获得批准，因为其审批要求相对较宽松。
第二，借款人可能存在信用问题。Hard money loans主要基于房产价值，因此信用评分和财务历史较不重要。Hard money loans贷款人更愿意与信用不佳或不符合传统贷款机构严格准则的借款人合作。
第三，抵押品或项目不符合传统贷款机构的信用要求。银行通常对每一项潜在的房地产贷款都有一定的标准，如可接受的房产类型、位置和入住率，以及更多技术性的考虑，如贷款价值比和债务服务覆盖率。如果您想更深入了解贷款价值比(LTV)和债务服务覆盖率(DSCR)，请观看我们的相关科普视频。这些是贷款人在审批投资性房地产贷款时用来评估风险的主要指标。
当银行说 "这不合适 "时
简短来说，这些贷款准则构成了银行所称的信用标准。这是一个比喻，基本上代表了他们对风险的接受程度。他们花了很多时间思考，开了无数次会议讨论，将其与银行监管规定进行比较，并与向投资者提供回报的需求相对比。一旦确定，如果一项交易不符合他们的信用要求，就会被拒绝。
尽管Hard money loans的需要支付的利息较高，但在某些情况下，使用Hard money loan是使交易顺利进行的唯一途径。在这些情况下，选择Hard money loans就是顺理成章。
G. Evan BennettG. 埃文-贝内特
As Creative Content Manager, Evan leverages over 20 years of experience in the commercial real estate and banking industries to bring insightful information to our community of lenders. He's also an active member of FIABCI, the International Real Estate Federation, currently serving as Vice President of its World Council of Developers and Investors, as well as President of its USA chapter, FIABCI-USA. 作为彼岸的创意内容经理，埃文利用自己在商业房地产和银行业从业的20多年经验，为我们的网站提供有见地的信息。他还是国际房地产联合会 FIABCI 的活跃成员，曾任FIABCI全球专家委员会秘书长，现任FIABCI美国分会FIABCI-USA主席。