Below are our guidelines for residential hard money loans, 1 to 4 unit properties. The proceeds of the loan must be used for a business purpose. Refer to our special guidelines for Fix & Flip Loans.
We do not make loans on 1-4 unit properties occupied by the borrower or any of the borrower's immediate family.
Residential Hard Money Loan Size
$100,000 to $2,000,000.
We focus on property located along the Front Range of Colorado, from Fort Collins to Colorado Springs. (See FAQ below.)
LTV (Loan to Value)
Our loan amount will be no more than 60-70% of the property value.
We're flexible, however the term will generally not be longer than 2 years.
Our interest rate can be as low as 9%, depending on the property, the location, the LTV, maturity date and the borrower. Borrower makes monthly,interest-only payments.
None. You may prepay your residential hard money loan from us at any time, without penalty.
Origination Fee (Points)
Origination fee is typically 2-5, points. This fee is dependent on the borrower, property, location, loan term, etc.
An appraisal may be required, but not usually.
An inspection fee may be required, but not usually
If there are not any major issues, 2-4 weeks is generally more than enough time to gather the information needed, inspect the property and schedule a closing with a title company. We have closed smaller loans in as little as 2 days.
Do you make fix & flip loans?
Yes. See our fix & flip loan guidelines.
Will you allow financing subordinate to my residential hard money loan?
Yes, we will allow a second lien position behind our first lien position
Will you make a residential hard money loan secured by real estate not located along the Front Range?
Yes. We will consider making a hard money loan elsewhere in Colorado, and have done so. However, depending on the location, you may incur additional expenses, including, but not limited to, an inspection fee and an appraisal fee.
Can I qualify for a loan if my credit history doesn't look stellar?
Yes. While we will pull your credit report and examine additional financial information, our decision to make the loan will be based primarily on an inspection of the property itself, our opinion of the value of the property and your exit strategy. We understand that bad things can happen to good people.
Will you extend my residential hard money loan if I reach the maturity date and have been unable to get the property sold?
Most likely, yes, provided you have made your payments on time, are not in default on any other loan provisions and the project fundamentals are substantially the same as those at the time the loan was originated. Our loan documents contain an extension provision.
Will you allow a cash-out refinance?
Yes, we will allow you to walk away from the closing table with cash in your pocket if our underwriting justifies a loan amount larger than that needed to pay off an existing loan(s). However, the cash out must be used for a business purpose. It cannot be for personal use, such as paying down credit card debt. Forrest Financial does not underwrite or fund consumer loans.