Hard Money Loan Arizona

Last updated: May 7, 2025

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OfferMarket is not NMLS licensed in Arizona. To serve real estate investor clients in Arizona, we operate as a rate shopping service and process your loan with the most competitive licensed capital provider on our platform.

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At OfferMarket, we’re passionate about helping Arizona real estate investors grow their portfolios and build long-term wealth. Our platform is your one-stop-shop for:

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Through our Hard Money Loan Arizona program, we offer fast, reliable, and competitively priced funding solutions for the purchase, refinancing, and renovation of 1-4 unit residential investment properties across the Grand Canyon State.

Whether your goal is to flip homes in booming markets like Phoenix and Tucson or to build your buy-and-hold portfolio in areas like Mesa, Glendale, or Scottsdale, we’re here to provide the capital and support to help you succeed.

Let’s dive into what makes OfferMarket’s Arizona Hard Money Loan program the smart choice for your next project.

What is a hard money loan?

In the Arizona real estate landscape, a hard money loan is a short-term lending solution secured by a hard asset — in this case, residential investment properties with 1 to 4 units. Whether you're aiming to renovate and resell for a profit or refinance and rent for passive income, this form of financing gets you to the closing table fast.

Also known as “bridge loans” or “fix and flip loans,” these financing tools are commonly used by investors throughout Arizona’s diverse markets to quickly close on deals, fund renovations, and optimize return on investment.

Hard money loan scenarios

Arizona real estate investors typically utilize hard money loans in the following situations:

• Acquiring and rehabbing a distressed property — for instance, you find a fixer-upper in Tempe and need funding to both purchase and improve it.

• Refinancing a cash purchase to free up capital — say you grabbed a great off-market opportunity in Chandler but now need to recoup funds to complete the remodel.

• Paying off a prior lender while finishing the renovation — perhaps your initial lender needs to be repaid, but your Glendale flip isn’t quite market-ready yet.

• Purchasing a property with no renovation plans — for example, acquiring a low-priced house in Flagstaff that you plan to sell “as is” for a quick profit.

• Refinancing a clean, cash-purchased property — maybe you locked in a deal below market in Peoria and now want to tap into that equity.

• Refinancing a recently rehabbed asset — you’ve completed improvements on a Surprise property and now need more time or want to extract cash for your next Arizona deal.

How it works

A typical hard money loan includes two parts:

• Initial Advance – The portion of the loan used for the property’s acquisition. This amount is wired directly to your settlement agent at closing.
• Construction Holdback – The funds reserved for your renovation budget, reimbursed as draws based on completed work.

You can structure your Arizona hard money loan however best fits your project. Need only acquisition funds for a turnkey rental in Gilbert? Skip the holdback. Focused purely on rehabbing a property in Yuma? Opt for a construction holdback without the initial advance. Most investors use both to maximize leverage and preserve their cash.

Exit strategies vary, and our loans are flexible enough to support either flipping or long-term rental plays. Whether you plan to resell a remodeled home in Queen Creek or refinance a rented property in Sierra Vista, we’ve got you covered.

It’s not uncommon to pivot your strategy. For example, maybe your original plan was BRRRR — buy, rehab, rent, refinance, repeat — but the resale market in Avondale spikes, making a flip more lucrative. Or maybe a flip becomes a rental when the buyer pool cools. That’s the beauty of dual exit strategies: you retain optionality in dynamic Arizona markets.

Who uses hard money loans?

In Arizona’s real estate ecosystem, two main types of investors benefit from hard money loans:

Fix and flip specialists – These are investors flipping properties in fast-moving markets like Phoenix, Scottsdale, or Tucson, taking advantage of the rapid appreciation and high buyer demand.

Buy-and-hold investors (BRRRR Method) – These investors renovate and rent out homes across Arizona, from the suburbs of Mesa to university towns like Tempe. They later refinance into long-term DSCR loans to continue scaling their portfolios.

At OfferMarket, we often work with hybrid investors who both flip and rent depending on market conditions. This flexibility is a proven strategy among Arizona investors.

Hard Money Loan Program Guidelines

We understand the Arizona market and tailor our guidelines to support your success. Here’s what our standard program looks like:

Project Eligibility

In Arizona’s dynamic real estate market, we aim to minimize investor risk. With foreclosure rates under 0.5% across our national portfolio, we pride ourselves on disciplined underwriting and borrower success.

Investors in Phoenix or Tucson taking on heavy rehabs without sufficient experience face real risk—especially with permitting timelines, labor shortages, or rising costs. That’s why we assess project complexity and only fund deals that match your experience and financial profile.

Initial Advance

Your upfront funding is tailored to your track record and the specific Arizona deal. We consider:

• Number of recent investment properties owned

• Past rehab project completions (verifiable)

• Minimum credit score (680, 720+ preferred for better leverage)

• Professional credentials like Realtor, General Contractor, or PE license

If your contract purchase price is above our As Is valuation, we’ll base the loan on the valuation—not the purchase amount.

Exit strategy also affects leverage. Selling? We look for a 30% margin and $15,000 profit minimum. Planning to refinance? The property’s DSCR after repairs must be 1.1 or higher.

Properties in rural parts of Arizona—say, outside major metros—require a higher experience tier and will see reduced leverage.

Experience-based Tiers

Initial Advance by Tier

(*) 85% available as an exception for strong credit/liquidity.

Adjustments to Initial Advance

Rehab scope classification

Rehab scope eligibility

LTARV Limits

LTFC Limits

Example: No Experience

• Purchase Price: $100,000

• Tier: 1

• Credit Score: 695

• Rehab Budget: $24,000

• ARV: $150,000

• Initial Advance: $75,000 (75%)

• Construction Holdback: $24,000

• Total Loan: $99,000

• LTARV: 66%

• LTFC: 79.8%

• Interest Accrual: Full Boat

Example: No Experience, Excellent Credit

• Purchase Price: $100,000

• Tier: 1

• Credit Score: 750

• Rehab Budget: $24,000

• ARV: $150,000

• Initial Advance: $80,000 (80%)

• Construction Holdback: $24,000

• Total Loan: $104,000

• LTARV: 69.33%

• LTFC: 83.9%

• Interest Accrual: As Disbursed

Example: 5 Experience

• Purchase Price: $100,000

• Tier: 4 (5 similar verified projects)

• Credit Score: 750

• Rehab Budget: $20,000

• ARV: $150,000

• Initial Advance: $90,000 (90%)

• Construction Holdback: $20,000

• Total Loan Amount: $110,000

• LTARV: 73.33%

• LTFC: 91.67%

• Interest Accrual: As Disbursed

Refinance using As Is value instead of Cost Basis for Initial Advance

In Arizona, many seasoned investors hold properties that have appreciated significantly. When you refinance, we may use the property’s current value (“As Is”) instead of your original purchase cost if:

• The property is in good shape (C4 condition or better)

• You’ve held it for 3+ years

• No default charges on the prior loan

• Guarantor has a FICO score of 680+

• Experience Tier is 3 or above

• Market comps support the As Is value

An example: You’ve owned a home in Phoenix since 2020, rented it, and now want to renovate and sell. If comps justify the higher value, we’ll base our loan on that — giving you more capital to work with.

Transactions involving wholesalers, price run-ups

Arizona is home to an active wholesaling community. If you're buying from a wholesaler, we may include part of their fee in the value we use for your loan — if the markup is reasonable:

• Wholesaler markup can be included up to 20% of the original contract price

• You must provide the full paper trail: A-B contract, B-C assignment, etc.

• Non-MLS deals only (we don’t finance markup on listed properties)

For example:

• A-B Contract: $100,000

• Assignment Fee: $25,000

• As Is Value: $125,000

• Eligible Basis: $120,000

Any markup over 20%? You’ll need to fund that difference yourself.

Construction Holdback

Your rehab funds (Construction Holdback) are reimbursed as you complete work. It’s a streamlined, tech-enabled process built for speed.

If you don’t want to use a holdback, that’s fine too — you can fully self-fund the rehab.

Appraisal and In-house valuation

For properties across Arizona — from urban Phoenix to suburban Gilbert or historic Bisbee — we require a valuation. Depending on your experience and project type, this might be:

In-house valuation (experienced borrowers only)

Exterior appraisal

applies to:

• REO, foreclosure, sheriff sale, bankruptcy auction

Interior appraisal

Appraisal Transfer

Already have an appraisal report in hand for your Arizona property? If it meets the right standards, we can transfer it into our underwriting process. Here's how:

Your appraisal must be:

• Ordered through a compliant appraisal management company (AMC)

• Dated within 180 days of your OfferMarket loan closing

• Re-certified if older than 120 days but less than 180 days

To approve the transfer, we require:

• A signed transfer letter from the original lender stating:
  “Lender certifies that the Appraisal was ordered and processed in compliance with the Appraiser Independence Requirements (AIR).”

• The full appraisal report in PDF and XML formats

• The original appraisal invoice as proof of payment

Appraisal transfers help investors in Arizona save time and money — especially if you’re refinancing a project you’ve recently improved or completed

Scenario: Stabilized Hard Money Loan

If you’re financing a clean, rent-ready property in Arizona (C4 condition or better), we may fund up to 75% of its As Is value.

Key Loan Details

Extensions

In Arizona’s fast-moving real estate market, most hard money projects are wrapped up within the original loan term — typically 12 months. That said, unexpected delays can arise. Whether it’s permitting issues in Scottsdale or contractor setbacks in Tucson, you might need a bit more time.

That’s where our extension policy comes in: it’s flexible but structured, designed to give you breathing room without compromising your exit plan.

Here’s what to expect:

Extensions can be requested in either 3-month or 6-month blocks depending on your needs.

Extension Terms and Fees

All extension fees are added to your payoff statement:

For example, if you have a $150,000 hard money loan on a property in Tempe and request a 3-month extension, your payoff would increase by $1,500 (1%).

Extension Prerequisites

To qualify for an extension in Arizona, you must ensure that your Builders Risk Insurance is active and will cover the entire new loan period — no gaps.

Best Practices to Avoid Extensions

Extensions add cost, complexity, and risk. To minimize the need for one:

• Choose a reputable, licensed contractor with experience in Arizona markets

• Avoid extensive rehabs if you're light on experience or liquidity

• Stay away from properties that come with tenant issues or long eviction timelines

• Make sure the local market supports both flip and rental outcomes (dual exit strategy)

For example, if you're rehabbing in Flagstaff — a market with tight permitting and seasonal weather — plan conservatively and have contingency buffers.

The more proactive you are at the start, the more likely you’ll finish ahead of schedule — and without the need for costly extensions.

Ineligible Property Types

While our Arizona hard money loan program is flexible, certain property types fall outside our lending criteria due to risk, liquidity, or underwriting constraints. We do not provide financing for the following property types in Arizona:

• Mixed-use buildings — including those with commercial storefronts and residential units

• Multifamily properties with 5 or more units

• Co-ops, condotels, and fractional ownership structures

• Mobile or manufactured homes, even if on a permanent foundation

• Cabins or log homes, which are difficult to value and insure

• Unique or luxury properties, including high-end custom homes with limited resale data

• Vacation and short-term rental properties, particularly in remote or unregulated markets

• Properties with oil, gas, or mineral leases

• Operating farms, orchards, or ranches

• Homes with dirt or unpaved road access, which limit marketability

These exclusions ensure that both OfferMarket and our Arizona borrowers focus on assets with strong resale potential, predictable exit strategies, and clean underwriting.

Exception Scenarios

We understand that real estate deals don't always fit perfectly into boxes. In Arizona, we may consider the following scenarios on an exception basis, depending on borrower strength, liquidity, and deal merit:

• FICO score between 660–679: If your credit is slightly below our minimum, we may still approve with interest reserves or higher equity

• Leasehold ownership: Land-lease deals may be eligible if they meet specific guidelines and have favorable terms

• Single family homes between 500–699 SqFt: Must be in urban areas with strong comps

• 2–4 unit properties with at least one unit between 400–499 SqFt

• Initial advance based on As Is value higher than your cost basis

• Non-arms-length transactions: For example, buying from a family member or business partner

• Financed interest payments: Instead of monthly interest, it’s added to the payoff balance

Each of these is subject to loan committee review and will require supporting documentation. Exceptions are not guaranteed but we strive to be flexible for high-quality deals in cities like Phoenix, Chandler, Tempe, and Glendale.

Borrower and Guarantor Requirements

To ensure safe, transparent lending, all Arizona borrowers and guarantors must meet the following eligibility criteria:

Arizona Tip: If you’re new to real estate investing, setting up an LLC in Arizona is quick and inexpensive. We recommend doing this before applying, as all loans must be made to business entities.

Liquidity Verification

Before funding your hard money loan in Arizona, we need to confirm that you (and any guarantors) have sufficient liquidity to safely execute your project. This isn’t just a box to check — it’s a key part of ensuring you're financially prepared to weather unexpected issues, from material cost overruns in Tucson to contractor delays in Flagstaff.

What do we verify?

You must have access to liquid funds that cover:

• Your cash to close (down payment + closing costs)
  plus

• At least 25% of your rehab budget

What counts as eligible liquidity?

We accept the following liquid assets:

• Personal bank accounts (checking or savings)

• Business bank accounts (including your LLC or other entities)

• Brokerage accounts (stocks, mutual funds, etc.)

• Retirement accounts (401k, IRA — valued at 50% due to withdrawal restrictions)

Arizona Tip: You don’t need to move the funds — they just need to be verifiable. Funds can remain in your accounts and don’t need to be seasoned, making this process quick and borrower-friendly.

Credit and Background Items

To responsibly fund hard money loans in Arizona, we perform a full review of your credit history and background. Our goal is to work with borrowers who demonstrate financial reliability and can navigate the risks of real estate investment.

Here’s how we evaluate your credit and background profile:

• Tri-merge credit report is required for all guarantors; must be dated within the last 120 days

• If 3 credit scores are available, we use the middle score

• If 2 credit scores are returned, we use the lower score

Additional Requirements:

Important for Arizona Borrowers: If you have a recent late payment or derogatory item, we may still consider your application with documentation and reserves. Our aim is to fund smart deals — not penalize past mistakes without context.

Interest Reserves

Depending on your credit profile, we may collect interest reserves at closing. These reserves are applied to your loan’s accrued interest and reduce or eliminate your monthly payments until depleted.

These reserves help prevent default, especially for Arizona investors managing large rehabs or complex flip timelines.

Financed Interest Payments

We offer the option of financed interest payments to help you preserve liquidity — an especially valuable tool when flipping homes in cash-intensive markets like Scottsdale, Mesa, or Surprise.

Instead of paying monthly interest, your accrued interest is added to your payoff balance.

Example:

• Loan amount: $100,000

• Interest rate: 12%

• Loan held for: 9 months

• Total interest accrued: $9,000

Your final payoff statement would show:

• Principal: $100,000

• Interest: $9,000

• Total due: $109,000

This option is ideal for investors who want to focus capital on renovations, not interest payments — especially in high-demand Arizona neighborhoods where speed matters.

Property Sourcing Guidelines

Arizona’s investment market moves fast — from distressed single-family homes in Tucson to wholesaler deals in Phoenix. To ensure smooth and timely funding, we require complete documentation for all loan submissions.

Key Points for Arizona Investors:

• New market transactions (buying in a city or region you haven’t invested in before) require:

  • A signed General Contractor (GC) agreement, or

  • A Letter of Explanation explaining why a GC is not needed (e.g., you’re self-performing the rehab or already have an established team)

• Properties with resale price spikes, assignment flips, or non-arms-length deals (such as buying from family or a partner) must include additional documentation. This helps us validate the legitimacy and pricing of the transaction.

• Condos, conversions, and major rehab projects (i.e. full gut renovations or room additions) should be supported by:

  • Architect or structural engineer letters, and/or

  • City-issued permits, if already obtained

• Every submission should include:

  • Fully executed purchase contracts

  • Settlement statements (past or pending)

  • Any payoff letters for refis

  • A complete track record

  • Your LLC or Corporation’s formation docs (Articles, Operating Agreement, W-9)

📄 Pro tip for Arizona flippers and landlords: Including this documentation up front can shave days off your closing timeline — especially in high-volume areas like Maricopa and Pima Counties.

Insurance Guidelines for Hard Money Loans

Protecting your Arizona investment property is just as important as funding it. Whether your project is a light cosmetic rehab in Gilbert or a vacant fix-and-flip in Glendale, the right insurance coverage is critical.

In the hard money lending world, this protection is known as Builders Risk Insurance — or sometimes Fix and Flip Insurance. It’s a specialized insurance bundle designed for:

• Vacant homes

• Properties under construction

• Dwellings in distressed condition

Coverages and Limits

Coverage Details

💡 Arizona Pro Tip: As soon as you take possession of your property, install smoke detectors, locks, and security cameras. These simple steps can help prevent denied claims — and may even reduce your premium.

Frequently Asked Questions

What states does OfferMarket fund hard money loans?

We fund investment property loans in all 50 states, including Arizona.
In Arizona, where licensing requires local capital partners, we operate through a trusted referral network to ensure your loan is sourced quickly and compliantly.

Can I have more than one hard money loan at a time?

Yes, and it’s quite common — especially for Arizona investors building a portfolio across cities like Phoenix, Mesa, and Tucson. We regularly fund multiple projects for the same borrower. That said, we always evaluate your liquidity and execution capacity before approving additional loans to help you manage risk responsibly.

Are hard money loans commercial?

Yes. Even if you're purchasing a residential property, your hard money loan is classified as commercial because it’s made to your LLC or corporation for business/investment purposes.

What is the minimum loan amount?

The smallest hard money loan we offer is $25,000 — perfect for entry-level investments in lower-cost markets like Yuma or Kingman.

Which property types are eligible?

We finance non-owner occupied residential real estate with 1 to 4 units:

• Single-family homes

• Townhomes

• Condos (warrantable only)

• Duplexes, triplexes, and quadplexes

Note: Mixed-use, mobile homes, or 5+ unit buildings are not eligible under this program, but may qualify under our multifamily or commercial lending programs.

How do you calculate Loan-to-Value (LTV)?

In hard money lending, Loan-to-After Repair Value (LTARV) is the most common metric:

• Initial Advance = Based on the lower of your purchase price or the As Is appraised value

• LTARV = Total loan amount (initial advance + rehab funds) ÷ projected ARV (from appraisal or in-house valuation)

We also look at Loan-to-Cost (LTC) and Loan-to-Full Cost (LTFC) depending on rehab scope.

What are the credit requirements?

A minimum FICO score of 680 is required to qualify.
Borrowers with scores between 660–679 may still be eligible on an exception basis with reserves or lower leverage. We only consider the credit scores of members who will be personally guaranteeing the loan.

What are the experience requirements?

None. You can be brand new to investing in Arizona and still qualify.

However, having experience with similar deals can increase your leverage and help you qualify for more complex projects (i.e. full gut renovations or extensive additions). Our Experience Tier System rewards verified project history — and the more you close with us, the better your future terms.

Does wholesaling count as experience?

No. Being part of a wholesale transaction — even if you earned a fee — does not qualify as investment experience.
We define experience as having been financially responsible for the purchase, rehab, and resale/refinance of the subject property.

What Documentation is Required?

Getting a hard money loan in Arizona is simple — but we still need complete, accurate documentation to keep the process fast and compliant. Whether you're purchasing a distressed property in Mesa or refinancing a rental in Tucson, the following tables outline everything you'll need to provide.

For Purchase Transactions

For Refinance Transactions

Are there special requirements for loans over $1M?

Yes. For Arizona loans above $1 million, you must meet tighter underwriting standards, including:

High-value projects come with high expectations — and we’re here to help you meet them with confidence.

Glossary of Key Terms

Navigating hard money lending terms can feel like learning a new language — especially if you're just starting out in Arizona real estate. This glossary explains the most important phrases you'll encounter during the funding process.

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