With the real estate market in the tanks, there are so many banks willing to sell at a low price, but they all require “proof of funds” or pre-approval letter.
I am pretty certain I can use hard money loans to purchase these properties, but since lenders have been tightening their requirements, is it still viable to get a hard money loan at 65% LTV? If so, can anyone help get around the above obstacles?
Thank you in advance.
Yes it is. However even HMLs are looking at credit and finances to ensure the borrower can make payments and refinance the loan if needed.
Good luck!
You should be able to get a proof of funds letter from most hard money lenders without having your credit checked.
Credit will probably come into play if the property is not considered easy to resell (i.e. an area in which most houses are non-owner occupied) and the HML feels that refinancing the property may be your only option.
Also, many HML have credit requirements based on the ARV of the property. For example, houses with an ARV lower than $80,000 may have credit requirements attached.
Its best to call around and ask Hard Money Lenders what their credit requirements are as they will differ from company to company.
LTV based hard money is less stringent in its demands (because you are going to be required to put 35-40% into the deal)—there are no credit/no income LTV based hard money loans available in many parts of the country.
As the previous poster indicated, don’t confuse this with ARV based hard money, because ARV lending allows for a higher degree of leverage (less money into the deal), the ARV HMLs are less forgiving (and more intrusive in most cases).
Regards,
Scott Miller