Hard Money Lenders Oregon: Quick Real Estate Loans
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Joseph Gordon EditorJoseph Gordon is an Editor with HomeLight. He has several years of experience reporting on the commercial real estate and insurance industries.
Considering a real estate venture in Oregon? Whether you’re eyeing a fixer-upper in the Pearl District or planning to purchase an investment property in the bustling Lloyd Center area, hard money lenders in Oregon offer a practical solution. These lenders provide quick, flexible financing options ideal for investors facing tight timelines, limited initial capital, or credit challenges.
This article will walk you through the ins and outs of hard money loans, explaining how they can help you achieve your real estate goals in Oregon. Plus, we’ll introduce alternative financing options for homeowners looking to leverage their equity.
Start Making Offers Without Waiting to Sell Your Home
Through our Buy Before You Sell program, HomeLight can help you unlock a portion of your equity upfront to put toward your next home. You can then make a strong offer on your next home with no home sale contingency.
Editor’s note: This post is for educational purposes and is not intended to be construed as financial advice. HomeLight always encourages you to consult your own advisor.
What is a hard money lender?
A hard money lender is a private entity or individual offering short-term loans secured by real estate. Unlike traditional banks, hard money lenders in Oregon focus on the property’s value rather than the borrower’s credit score or income.
These loans are popular among real estate investors, including house flippers and those purchasing rental properties. Hard money lenders determine loan amounts using the after-repair value (ARV), which is the property’s estimated value after renovations. They typically lend a percentage of the ARV to secure their investment.
Interest rates for hard money loans are higher, ranging from 8% to 15%, and repayment terms are usually between 6 and 24 months. Borrowers also face costs like origination fees, closing costs, and points. If a borrower fails to repay, the lender can seize the property to recoup its investment.
How does a hard money loan work?
For real estate investors in Oregon needing quick and flexible financing, hard money loans offer an alternative to traditional funding. Here’s how these loans work:
- Short-term loan: Hard money loans usually have a 6 to 24-month repayment period, unlike traditional 30-year mortgages. Some lenders may extend the term up to 36 months.
- Faster funding option: When speed is essential, hard money loans can be approved in days, much faster than the typical 30 to 50 days for conventional loans.
- Less focus on creditworthiness: Hard money lenders prioritize the property’s value over the borrower’s credit score and income history.
- More focus on property value: Loans are based on the collateral’s value, utilizing the loan-to-value ratio of the property.
- Not traditional lenders: These loans are provided by private investors or specialized lending firms, not by traditional banks.
- Loan denial option: Suitable for those who can’t secure a mortgage due to poor credit but have ample home equity.
- Higher interest rates: The risk associated with hard money loans results in higher interest rates compared to conventional loans.
- Might require larger down payments: Borrowers often need to make larger down payments, sometimes ranging from 20%–30% of the property value.
- More flexibility: Hard money lenders can offer flexible terms and debt-to-income requirements tailored to unique borrower needs.
- Potential for interest-only payments: These loans may include provisions for interest-only or deferred initial payments, unlike traditional mortgage structures.
What are hard money loans used for?
Hard money loans serve specific financing needs, particularly for those requiring quick funding or facing challenges with traditional bank loans. Here’s how they can be useful:
Flipping a house
Hard money loans offer Oregon investors quick access to cash for flipping homes. These loans allow investors to purchase properties, make necessary renovations, and sell them for a profit in a short timeframe.
Buying an investment rental property
Investors looking to acquire rental properties can use hard money loans to secure properties quickly, especially those needing immediate repairs. This enables landlords to complete renovations and begin generating rental income faster than traditional loans.
Purchasing commercial real estate
Hard money loans are ideal for commercial real estate transactions due to their flexibility and fast closing times. They are particularly useful when investors need to secure valuable commercial properties without the usual delays.
Borrowers who can’t qualify for traditional loans
Individuals with substantial home equity but poor credit or other issues may find hard money loans a viable option. These loans focus on the property’s value rather than the borrower’s credit score, providing an alternative financing route.
Homeowners facing foreclosure
Homeowners nearing foreclosure can use hard money loans to refinance their debts or buy time to sell their property. This solution can help avoid the loss of their home or a foreclosure mark on their credit report.
How much do hard money loans cost?
The cost of hard money loans is higher due to the increased risk and quick, less restrictive funding. Here are some typical costs:
- Interest rates: These can range from 8% to 15%.
- Origination fees: Lenders may charge 1% to 5% of the total loan amount.
- Closing costs: Additional fees at closing can include legal fees, appraisal fees, and other administrative costs.
- Points: Lenders might charge points (a percentage of the loan amount) upfront.
Online calculators can help you estimate these costs accurately.
Alternatives to working with hard money lenders
If you’re a homeowner looking to leverage your current home’s equity, here are several alternatives to consider:
Take out a second mortgage: If you have substantial equity in your home, a home equity loan or home equity line of credit (HELOC) can provide needed funds at a lower interest rate compared to a hard money loan.
Cash-out refinance: This option allows you to refinance an existing property, pulling out cash to finance your new investment, often with lower interest rates than hard money loans.
Borrow from family or friends: A personal loan from family or friends can offer flexible repayment terms and potentially lower or no interest rates, making it a more affordable option.
Use a government-backed loan program: Programs offered by the FHA, VA, or USDA can assist in purchasing homes with lower down payments and reduced interest rates.
Peer-to-peer loan: These loans are provided by individual investors through lending platforms like Funding Circle, functioning similarly to hard money loans but often with different terms.
Specialized loan programs: Consider specialized loans for fixer-uppers or investment property refinancing if you already have a hard money loan and seek to replace it.
Request a seller financing option: In some cases, sellers may agree to finance the purchase themselves, which can result in lower closing costs and less stringent eligibility requirements.
How to buy before you sell
Sometimes, the perfect listing pops up when you’re least expecting it. Maybe it’s a charming Craftsman home or a loft in downtown Oregon. If you’re a homeowner wanting to buy a new home before selling your current one, HomeLight offers an innovative solution that streamlines the process.
The Buy Before You Sell (BBYS) program allows you to leverage the equity in your existing home to make a stronger, non-contingent offer on a new property. If your home qualifies, you can get your equity unlock amount approved in 24 hours or less, with no cost or commitment required. Once approved, you can confidently purchase your next home and then sell your current one vacant, avoiding the hassle of moving twice.
Here’s how HomeLight Buy Before You Sell works:
Although there’s a flat fee of 2.4% of your current home’s sold price, the potential savings in other areas might outweigh the cost.
For example, you might save on moving expenses, temporary housing, and even the final purchase price of your new home. Additionally, HomeLight’s BBYS fees are typically much lower than the interest rates on bridge loans, which currently range from 9.5% to 12%.
3 top hard money lenders in Oregon
Traditional lenders might not be the solution for every real estate investment. If you’re looking to move quickly and capitalize on an opportunity, explore the hard money lending options available in Oregon.
Northwest Private Lending
Northwest Private Lending offers hard money loan options for a variety of clients, including house flippers or those looking to purchase properties not conventionally financeable. They specialize in Bridge Loans, fix-and-flip, and fix-and-hold projects.
Lending clientele: Real estate investors
Loan criteria:
75% or lower LTV of the purchase of an investment property
70% or lower LTV of the refinance of an investment property
50% LTV of the purchase or refinance of bare land
100% LTV loans available with additional collateral / cross-collateralization of other investment properties.
Northwest Private Lending has a Google rating of 5.0 based on more than 60 reviews. Customers highlight their professionalism, responsiveness, and exceptional service. The company also holds an A+ rating from the Better Business Bureau.
503-941-5473
Cetan Funds
Cetan Funds offers hard money loan programs for various needs, including residential construction, fix-and-flip rehabs, and commercial projects. Their loans can close in as few as seven days, with tailored terms to fit each borrower’s needs.
Lending clientele: Real estate investors
Loan criteria: Up to 70-75% of the ARV
Cetan Funds has a Google rating of 4.8 based on more than 20 reviews. Customers highlight their local market expertise, clear communication, and quick-draw payments.
458-215-3200
Blue-Inc. Capital
Blue-Inc. Capital offers loans for industrial and commercial buildings, ranchland, forestland, apartment buildings, single-family homes, and more. Blue-Inc. Capital makes loan decisions in-house, allowing flexibility and the ability to handle unusual situations.
Lending clientele: Real estate investors and home buyers
Loan criteria: Up to 70 percent of the purchase price
Blue-Inc. Capital has a Google rating of 5.0. Customers highlight their knowledgeable staff, hands-on experience, and efficiency. The company also holds an A+ rating from the Better Business Bureau.
541-434-1818
Investing in real estate?
Hire an investor-friendly real estate agent who can help you get access to off-market properties at a discount and assess potential rental income based on market trends. HomeLight can connect you with investment property specialists at no cost.
Should I partner with a hard money lender in Oregon?
Deciding whether a hard money loan is right for you depends on your specific needs and real estate investment goals. These loans are ideal for investors needing quick funding or those unable to secure traditional financing. If you can handle the higher costs and shorter repayment terms, a hard money loan can provide the fast, flexible financing you need for your next project in Oregon.
For homeowners wanting to leverage their home’s equity, HomeLight’s Buy Before You Sell program is a great alternative. Instead of high interest rates, you’ll pay a small flat fee and benefit from a competitive offer and simplified move.
As always, consider your long-term strategy and consult with a financial advisor. If you need help connecting with investor-friendly real estate agents in Oregon, HomeLight can introduce you to top professionals who can assist you.
Header Image Source: (Milan Seitler/ Unsplash)
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