A hard money commercial loan is private financing underwritten primarily to the property: its as-is value or after-repair value, the loan-to-value against it, and the equity cushion protecting the lender if everything goes wrong. That model buys speed and tolerance for borrower files a bank would decline. It also produces the most misquoted pricing in commercial real estate — because the honest price of a hard money loan is a rate plus points plus fees over a very short term, and quoting any one element alone is a way of lying with true numbers. This page prints nothing unattributed: published sources disagree materially on both rates and points, so each figure below sits beside its source.
General information, not financial advice. No lender named in the sources below is recommended; they are cited because they published the figure.
The underwriting sequence runs roughly: what is the property worth as-is (appraisal or broker price opinion), what will it be worth when the plan is done (ARV), what percentage of that value is the loan, and what is the exit? Commercial guides commonly show roughly 60–75% LTV — sometimes expressed against ARV or loan-to-cost instead of as-is value, which changes what the percentage means, so read the denominator on any quote.
“Asset-based” does not mean the borrower is unexamined. Across lender pages, the review still recurs on: the appraisal/BPO, title, the sponsor’s own equity in the deal, the scope of work, evidence for the exit, and frequently credit history and experience. What is waived is the bank’s full income documentation and global cash-flow underwriting — not scrutiny itself. A borrower with no equity, no exit and a story is not a hard money candidate either; the cushion is the approval.
One point = 1% of the loan amount, paid at closing. On a $500,000 loan, one point is $5,000 out of your pocket before the first interest dollar accrues.
Published origination ranges for commercial hard money disagree by source, and this page shows the disagreement rather than smoothing it: 1–3 points, 1–4 points and 2–5 points all appear in current lender and guide material, varying by lender and geography. Any single “typical points” figure quoted without a source should be treated as marketing.
The reason points matter more here than anywhere else in this cluster is the term. Points are paid once, upfront, but the loan may live only 6–24 months. Three points on a 12-month loan annualise to roughly three extra points of cost on top of the coupon — the shorter the loan, the heavier each point weighs. That arithmetic is why this page, and the rates snapshot, always print points beside the rate.
Other current sources run 9–18% and 10–18% depending on geography and lender type. The spread between honest sources is itself the finding: there is no market rate for hard money, there is only the quote in front of you, read whole — rate, points, fees, term, prepayment terms — against the alternatives.
The recurring form: 6–36 months (often 6–24), interest-only, balloon at maturity, prepayment terms that vary and must be read. Where the loan funds renovation, the construction money is typically held back and released in draws against inspections of completed work — the lender controls the scope budget, not just the calendar. Expect the agreement to be tighter than a bank’s on insurance, taxes, additional debt and transfers, precisely because the lender’s protection is the asset and the documents around it.
Hard money earns its price in a narrow set of situations: a time-sensitive acquisition a bank calendar cannot meet; a transitional property whose income does not yet exist; a bank-declined file where the property and the equity are genuinely strong; always paired with a dated, credible exit — a refinance the stabilised property can actually carry, or a sale.
The failure mode is symmetrical: a hard-money loan with no exit is a countdown, not a solution. Interest-only payments retire nothing; the balloon arrives on schedule whether the plan worked or not; and rolling one hard money loan into another stacks a second set of points on a property that has not yet proven it can carry permanent debt. If the exit depends on everything going right, the product is mispriced for you at any rate. Compare the plan-led version of short-term CRE debt in commercial bridge loans — the operational distinction between the two is stated there and applies here: bridge is underwritten to the business plan and exit; hard money is underwritten collateral-first, to as-is value and the equity cushion.
What is a hard money loan? A short-term loan from a private lender, underwritten primarily to the property’s value — as-is value or after-repair value, the loan-to-value against it, and the borrower’s equity cushion — rather than to the borrower’s full income documentation. For commercial property it is used mainly for transitional, time-sensitive or bank-declined deals with a defined exit.
What are typical hard money loan terms? Current lender guides converge on the shape if not the price: 6–36 months (often 6–24), interest-only payments, a balloon at maturity, and roughly 60–75% LTV in many commercial guides — sometimes measured against ARV or total project cost rather than as-is value, which changes the meaning of the percentage.
What are current commercial hard money rates? There is no single figure, and honest sources disagree: Nav’s October 2026 snapshot shows 10%–14% (6–36 months, interest-only); CNBC Select’s range as quoted by YieldStack is 8%–15%; AVANA Capital’s guides show 9%–14%; other sources run to 18%. Every one of those is before points and fees, which is where a large share of the real cost sits.
Are hard money loans worth it for commercial real estate? When the deal is time-sensitive or transitional, the equity is real, and the exit is dated and credible — the speed and certainty can be worth the premium, because the alternative is losing the deal. When the exit is speculative, no: you have bought an expensive countdown. Worth is a property of the exit, not of the loan.
Are hard money loans non-recourse? Some are, many are not. Private lenders vary: some lend against the property alone, others require personal guarantees from the sponsors alongside it, and carve-outs for fraud and misappropriation are common even in non-recourse executions. The guaranty section of your own documents — not the product label — answers the question.
What are the risks associated with hard money loans? Cost concentration (rate plus points over a short term), a balloon that arrives regardless of the plan’s progress, draw controls that can slow a renovation, and the rollover trap: refinancing one hard money loan with another pays a second round of points without fixing the underlying problem. The common thread is time — every risk on this list is a version of running out of it.
General information, not financial advice. Sources: shared fact bank, LessOwe cluster 1.3 research (2026-10-23) — rate snapshots: Nav commercial rates (observed 2026-10-23), CNBC Select range as quoted by YieldStack, AVANA Capital guides; points ranges and structures as published across Linton Global Solutions, AVANA Capital, CommercialRealEstate.loans, Janover and YieldStack guide material, observed October 2026. Currency verified 2026-10-23.