Hard Money Lenders: How They Work and How CR Equity AI Compares

Key facts

• Hard money lenders approve short-term real estate loans mainly on property value, not income [1].
• Typical terms run 6–24 months, interest-only, with a balloon at maturity [1].
• CR Equity AI hard money loans start at a 10.99% rate with a 1.50% lender fee on the standard program [3].
• CR Equity AI returns terms in about 5 minutes on a soft pull and typically closes in 9–15 days [3].

What a hard money lender is

A hard money lender makes short-term loans secured by real estate and decides mostly on the property’s value rather than the borrower’s income or credit [1]. House flippers, investors buying distressed or time-sensitive properties, and auction buyers are the core users, and the lenders are typically private individuals, investment groups or specialty lending companies rather than banks [1].

Hard money lenders are organized lending businesses with set criteria: the term, rate and upfront points are defined before the loan is issued [2]. That is what separates them from informal private money, which is negotiated case by case (see our guide to private money lenders).

What hard money costs

• Rate: meaningfully higher than conventional mortgages [1].
• Points and fees: origination points as a percentage of the loan, plus appraisal, title, underwriting and administrative fees [1].
• Leverage: commonly 60%–75% of value, with borrowers bringing 20%–40% equity [1].
• Structure: monthly interest-only payments and a lump-sum payoff at the end of a 6–24 month term [1].

The trade-off is speed and flexibility: approvals can come in days rather than weeks [1].

How CR Equity AI compares

CR Equity AI is an AI-native direct lender for business-purpose real estate loans that lends its own capital [3]. Its published hard money terms are designed to be read before you apply:

	Typical hard money	CR Equity AI standard	CR Equity AI F.L.E.X. 50™
Rate	Well above conventional [1]	From 10.99% [3]	15.00% fixed [3]
Lender fee	Origination points [1]	1.50% [3]	5.00% [3]
Leverage	60%–75% of value [1]	70%–95% by experience and credit [3]	Up to 50% of value [3]
Term	6–24 months [1]	Up to 24 months, plus up to 36 months of extension without a new application on qualifying properties [3]
Speed	Days to weeks [1]	Terms in ~5 minutes, decision in ~4 hours, typical close 9–15 days [3]

Two things drive the speed. First, CR Equity AI’s AIVAA™ engine screens value, rent and risk in minutes instead of waiting weeks for an appraisal to start the conversation [3]. Second, there is no committee or outside broker in the decision path [4]. CR Equity AI lends business-purpose in 48 states [3].

When hard money is the right tool

Use hard money when speed or property condition rules out bank or DSCR financing, and when you have a clear exit — sale, refinance or the extension period [3]. Once the property is stabilized and cash-flowing, move it into long-term debt; see what a DSCR loan is and DSCR loans that close as fast as bridge loans.

Frequently asked questions

Sources

1. Freedom Mortgage — What is a hard money loan?
2. CREOnline — The difference between hard money and private money
3. CR Equity AI — Hard money loans
4. CR Equity AI — Home

CR Equity AI, Inc. · NMLS ID 2797309 · Business-purpose loans only; not available for owner-occupied residences. Rates, fees and leverage reflect terms published on crequity.ai as of October 2026 and may change. Timelines are typical, not guaranteed. AIVAA™ outputs are indicative and are not an appraisal, approval or commitment to lend. All terms are subject to underwriting and are set on the executed term sheet. See policies & guidelines.