Hard-money loans are mortgage loans that are offered by private individuals rather than financial institutions such as banks or credit unions. These individuals are known as “hard-money lenders.”

Borrowers who do not qualify for mortgages through financial institutions often look to hard-money loans as an option. These borrowers usually have bad credit, insufficient income, or other factors that are considered undesirable to financial institutions. Property conditions may play a role as well.

A hard-money loan may be an attractive choice for borrowers who are behind on their mortgage payments or in danger of foreclosure.