HARD MONEY DOCUMENTATION REQUIREMENTS:
What Is Needed for a Hard Money Loan

Part 1 of 2

by: Weston A. Jones
November 10, 2003

Everyday I am asked the same question "What documents do you need?" or "What do you need in a package?" Only after an investor is interested in funding your loan will you get a detail list of requirements. This list will adjust as new issues come up like unreconveyed loans, unknown judgments on the property, etc. Generally speaking, here is a helpful list of possible documentation requirements for your loan. (Pleas note: This list is comprehensive, but vary by lender and property type.) The list is broken into sections for easier review.

Main Requirements: The following are documentation requirements typically required for all loans:

• Executive or Offering Summary with a property history,
• Borrowers Experience,
• Most Recent Appraisal, opinion of value (BPO) or comps,
• Title Report, if not available please provide APNs or similar,
• 1003 or similar loan application,
• Credit report or authorization to pull credit,
• Color photos of the Property- front, rear, side, inside and street scene,
• Schedule of monies invested in project to date including if applicable purchase date, amount, etc.,
• Acquisitions need a copy of purchase contract and escrow instructions,
• Use of funds schedule,
• Pro forma financial, and
• Research and any other support documentation available (i.e. Notice of Default, Foreclosure information, etc.).

Income Property: Income properties have additional requirement which are listed below;

• Rent Roll (List of tenants unit, name, unit size/bedrooms, term of lease, current rent),
• Schedule of Leases (List of tenants, start date, lease expiration, square footage, mix, deposits and rent),
• Copies of all tenant leases or rental agreements, and
• Property; last two years income and expense statements, along with a year-to-date operating statement.

Construction Projects: These have additional requirements listed below;

• Copies of construction plans and budgets, and
• Funding Schedule.

Land Acquisition and Development: Additional requirements are listed below;

• Environmental Reports (Phase I),
• Environmental Impact Report (EIR) and Wildlife Studies,
• Plat Map (preliminary or final),
• Survey and Engineering Work Copies,
• Please provide a write up with government agency's letters, notes, etc., and
• Funding Schedule.

to be continued...

We’re Fast Money
At Mentor Financial Group (“MFG”), our business is to fund investments secured by trust deeds on commercial real estate, including income producing properties (i.e. apartments, office buildings, etc.), land and development projects (i.e. construction loans, rehabs, condo conversions, etc.) and non-owner occupied residential properties.

Click here for the printable version of this article.

back to top