Quick answer
Texas hard money loan requirements focus on the investment property, project plan, borrower profile, equity position, documentation, and exit strategy. Cedar Top reviews non-owner-occupied Texas investment property deals, subject to underwriting, collateral review, title review, documentation, and approval.
A Texas hard money loan is asset-focused, so the requirements look different from a bank loan. We review the property, project plan, borrower profile, equity position, documentation, and exit strategy. Credit and income may still be reviewed, but they are not the deciding factors. For how hard money works overall, start with what hard money lending is, and for the programs themselves, see our hard money loan programs.
Core requirements for a Texas hard money loan
We review the following:
| Requirement | What we look at | Why it matters |
|---|---|---|
| Texas investment property | That the property is investment real estate located in Texas | We lend on Texas investment property |
| Business purpose | That the loan is for a business or investment purpose | Hard money here is not consumer mortgage lending |
| Non-owner-occupied use | That the property is not a primary residence or homestead | We lend on non-owner-occupied property only |
| Property value and condition | The collateral, its condition, and supporting value information | The property carries the loan |
| Project plan | The scope of work, budget, and plans where relevant | The plan drives renovation and construction reviews |
| Borrower profile | Credit, experience, liquidity, entity, and background, as applicable | The borrower is reviewed alongside the property |
| Equity or cash to close | The equity in the transaction and your cash position | Hard money is leverage-based |
| Title status | Title condition and a lender's title policy | Title issues can slow or stop a transaction |
| Insurance | Appropriate insurance for the property and project | Collateral is protected during the loan |
| Exit strategy | How the loan is expected to be repaid | A clear exit makes a deal easier to review |
| Documentation | The supporting documents for the property and deal | Complete information keeps the review moving |
How requirements differ by loan type
| Loan type | Common use | What we look at |
|---|---|---|
| Fix-and-flip project | Buy, renovate, and resell a non-owner-occupied property | Purchase price, scope of work, budget, value support, and resale exit |
| New construction project | Ground-up or spec build on investment property | Plans, budget, the project plan, and the completion-and-sale or refinance exit |
| Bridge loan | Short-term financing to acquire or hold now and refinance or sell later | The property, the timeline, and the refinance or sale exit |
| Raw land acquisition | Lots, acreage, and rural property many lenders avoid | Collateral value, access, title and survey items, and the plan for the property |
| Commercial investment property | Retail, office, and value-add commercial property | The property, income or value-add plan, and the exit strategy |
| Transactional funding | Same-day double close for wholesalers | A confirmed end buyer at title and the transaction structure; see the transactional funding checklist |
Property requirements
The property comes first, because hard money is secured by it. Depending on the deal, we look at:
- The property's location in Texas
- Non-owner-occupied status
- The collateral's condition
- The purchase price
- An estimated current value
- A projected value if the property is improved
- Photos
- Access to the property
- Title status
- Insurance availability
- Rural or raw land considerations, such as access, survey, and use, where relevant
Business purpose and eligible use
We make business-purpose and investment-purpose loans on non-owner-occupied investment property. Owner-occupied homes, primary residences, and homesteads are not the right fit. In Texas that distinction matters, because owner-occupied and homestead lending is regulated very differently. For legal, tax, title, and entity questions, talk to the appropriate professional.
How we review the borrower
Hard money is asset-focused, but the borrower still matters. Depending on the deal, we may still review credit, experience, liquidity, entity information, background, the project plan, and the exit strategy.
A strong property does not automatically overcome every borrower or documentation issue. We review the property, project plan, borrower profile, and exit strategy before determining whether a deal fits.
How much down payment do you need?
There is no fixed down payment percentage. Your cash to close is set by the leverage cap for the program: up to 75% of ARV on a fix-and-flip loan, up to 90% loan to cost on new construction, up to 75% loan to value on a bridge loan, and up to 65% of market value on raw land. You bring the gap between the loan and the total cost of the deal, plus the origination fee of 2% to 4%, the $995 document fee, closing costs, title, insurance, and reserves.
| Program | Maximum leverage | Loan amounts |
|---|---|---|
| Fix and flip | Up to 75% of ARV | $50,000 to $1,000,000 |
| New construction | Up to 90% loan to cost, within 70% loan to value | $50,000 to $1,000,000 |
| Bridge | Up to 75% loan to value | $50,000 to $1,000,000 |
| Raw land | Up to 65% of market value | $50,000 to $2,500,000 |
| Commercial | Up to 75% loan to value | $50,000 to $1,000,000 |
| Transactional funding | 100% of the purchase price and closing costs | Requires a confirmed end buyer at title |
A solid deal below the cap is easier to review than a thin deal at the cap. Exact leverage is set in the term sheet, subject to underwriting, collateral review, title review, documentation, and approval. Current figures are on the rates and terms page, and you can run your numbers in the hard money loan calculator.
Exit strategy
Every loan needs a way out. Common exit strategies include:
- Sale after renovation
- Refinance after stabilization
- Sale of another property
- Construction completion and resale
- Commercial refinance
- Land resale or a development plan
An unclear exit makes a deal harder to review, so have a realistic plan for how the loan gets paid back before you apply.
Documents we may ask for
Expect to send the property address and photos, the purchase contract, entity documents and ID, a scope of work and budget on renovation or construction deals, a title company contact, an insurance contact, and your exit plan. Not every deal requires every item.
Fuller list: our documents checklist.
What can slow down a hard money loan review
These do not always stop a deal, but they can slow the review or require more documentation:
- Unclear ownership or title issues
- A missing purchase contract
- An unclear scope of work
- An unrealistic renovation budget
- Unsupported value assumptions
- No clear exit strategy
- A property outside Texas
- Owner-occupied use
- Insurance problems
- Missing entity documents
- Incomplete borrower information
What does a hard money loan cost?
Our loans start at 12% interest with an origination fee of 2% to 4% and a $995 document fee. Payments are interest only, there is no prepayment penalty, and a lender's title policy is required. On renovation and construction loans, draw fees start at $250. Transactional funding is priced differently: a 1.5% fee with a $1,500 minimum, paid only if the deal closes. Title costs, insurance, and closing costs vary by deal and show up in the term sheet. Current figures for every program are on the rates and terms page, and terms like ARV and LTV are defined in the private money loan glossary.
Common mistakes before applying
- Assuming credit never matters
- Submitting a deal without a purchase contract
- Using unrealistic ARV assumptions
- Underestimating renovation or construction costs
- Skipping title review
- Not having insurance lined up
- Having no clear exit strategy
- Trying to use business-purpose hard money for a primary residence
- Sending incomplete information
Related resources
Apply for a Texas hard money loan
We lend on business-purpose, non-owner-occupied Texas investment property. Review is subject to underwriting, collateral review, title review, documentation, and approval.