Alternative Lending for Owner-Occupied Homes
Private Hard Money Lending is NOT for Owner-Occupied Homes!
Due to strict government regulations and compliance requirements, private and hard money lenders do NOT offer loans for consumer purposes. Purchasing a home that you plan to live in or getting an equity cash-out loan for personal expenses are both considered to be consumer mortgages.
This also applies to properties with 2, 3 or 4 units. If you’re planning to live in one unit and rent out the others, it’s still considered owner-occupied.
Alternatives to Private & Hard Money
The first alternative is called non-QM, also known as non-prime. QM stands for qualified mortgage, so non-QM loans are those which fall just outside the traditional standards of a qualified mortgage. This includes low credit scores, self-employment, seasonal income, and other unique situations.
One of the main qualifications for non-QM loans is showing the ability to pay. So you qualify based on income and equity.
Also, if you are purchasing a home with a non-QM mortgage, you’ll need to have a cash down payment of at least 20% of the purchase price.
You can find a few non-QM lenders on our website. Scroll up to the top of this page and enter a state or major metro area.