FHA Slowdowns Present Opportunities for Hard Money Lenders
Non bank lenders, sometimes called hard money lenders, are stepping up to finance many FHA loans in limbo. The recent government shutdown, FHA loans have come to a screeching halt. While those FHA loans already with a firm funding date are still scheduled to close, borrowers who were waiting for FHA to give them a closing date may continue to wait. For this reason, many of those in waiting are seeking other options for financing such as bridge loans from hard money lenders.
For private and hard money lenders, this FHA slowdown presents an opportunity to provide loans for new acquisitions and refinances. But what are the types of properties that hard money lenders will be financing? All types of commercial property from multifamily property to office buildings, and particularly any new purchases with strict settlement deadlines. Because every real estate investor knows a good deal won’t stick around long, many borrowers in waiting for FHA financing are motivated to search for bridge financing alternatives such as hard money lenders and private money lenders.
Even for borrowers who can qualify for the low interest rates loans offered by FHA, having to pay the higher interest rates charged by hard money lenders is better than losing the opportunity to purchase a property at a tremendous value. If you’ve never used private money loans to finance your real estate, the government shutdown may be enough of a motivation for you to investigate this option. Our blog called ‘Hard Money 101’ shares important information such as how to avoid lending scams in hard money when searching for alternative sources of financing. If you are seeking bridge financing or a hard money loan for an acquisition or a refinance loan, take a look at our programs here.