Hard Money Loan Hawaii

Last updated: May 9, 2025

At OfferMarket, we’re on a mission to help you build long-term wealth through smart real estate investing — and Hawaii is no exception. Whether you’re scouting fixer-uppers on Oʻahu, flipping bungalows on the Big Island, or renting duplexes on Maui, we offer a comprehensive all-in-one platform built for local investors:

💰 Private Lending
☂️ Insurance Rate Shopping
🏚️ Off-Market Properties

Our Hawaii Hard Money Loan program is crafted to deliver fast, reliable, and cost-effective financing options for 1-4 unit residential investment properties statewide.

Whether you plan to flip your property or stabilize and refinance into a DSCR loan, we’d be honored to play a role in your real estate journey and help you thrive in the Aloha State.

Let’s dive into the OfferMarket Hard Money Loan Program.

What is a hard money loan?

A hard money loan is a short-term real estate loan secured by a physical asset—typically a 1-4 unit residential property. This type of financing is widely used by real estate investors in Hawaii to purchase, renovate, refinance, and profit from properties.

You may hear the term used interchangeably with “bridge loan” or “fix and flip loan.” Regardless of the name, the core idea remains the same: these loans offer speed, flexibility, and funding that conventional loans often cannot match.

Hard money loan scenarios

Real estate investors in Hawaii tap into hard money loans for a variety of reasons:

• Purchasing and renovating a dated or storm-damaged home on Kauaʻi, using loan funds instead of personal capital

• Refinancing a property initially acquired with cash from a motivated seller, then using the loan to fund needed upgrades

• Taking out a new loan to replace an existing high-interest or maturing loan while completing a renovation

• Acquiring an investment property in AS IS condition below market value, with no plans for improvements

• Releasing equity from a cash purchase to reinvest in a new deal, without making renovations

• Refinancing after rehab completion to hold the property longer or sell when market conditions improve

How it works

Every hard money loan in Hawaii from OfferMarket consists of two main parts:

• Initial Advance: This covers a portion of the purchase price and is disbursed to the title company at settlement.
• Construction Holdback: This funds your renovation and is reimbursed through draw requests as work progresses.

You can opt for either component, or both, depending on your strategy. Many Hawaii investors choose both to maximize leverage and reduce personal cash outlay. Others use only the Initial Advance or only the Holdback based on their rehab plans and capital reserves.

Whether you’re flipping a plantation home on Molokaʻi or planning a BRRRR strategy for a Honolulu duplex, we’re flexible. The choice is yours.

Your exit strategy will ultimately guide your financing decisions. You might enter a project with a BRRRR plan—Buy, Rehab, Rent, Refinance, Repeat—but pivot to a flip if the resale market is favorable. Or perhaps you’ll shift from a planned flip to a rental hold if tourism-driven housing demand temporarily cools.

Flexibility is critical in Hawaii’s diverse and dynamic real estate market, where market shifts, seasonal cycles, and local regulations can influence your path. Having dual exit options helps you reduce risk and remain profitable.

Who uses hard money loans?

In Hawaii, real estate investors span a broad spectrum — from first-time flippers on Oʻahu to experienced rental investors expanding portfolios across the islands. Here’s who typically relies on hard money loans in the Aloha State:

• Fix and flip investors – Also known as "flippers," these investors seek to buy undervalued homes, renovate them, and quickly sell for a profit. Whether it's a beach cottage in Hilo or a 1960s walk-up in Honolulu, speed and funding flexibility are critical.
• Rental property investors – Especially those following the BRRRR method (Buy, Rehab, Rent, Refinance, Repeat). Our Hawaii-based clients use our Fix and Rent bundle to transition seamlessly from hard money to DSCR loans, especially in popular long-term rental zones like Kihei or Kailua.

Many investors pursue a hybrid model — flipping certain properties while holding others as rentals. This dual approach is particularly valuable in a market like Hawaii where housing trends and rental demand vary island by island.

Hard Money Loan Program Guidelines

Project Eligibility

At OfferMarket, your success is our priority. In Hawaii, where real estate investments often involve unique logistics and island-specific permitting, we prioritize conservative risk management to help you avoid common pitfalls.

Fewer than 0.5% of our nationwide loans ever go into foreclosure. We intend to keep that number low by guiding you into projects you’re equipped to manage. That’s especially critical when tackling properties with large-scale renovations or remote access in places like Lānaʻi or Kauaʻi.

We work closely with borrowers as a funding partner, risk manager, and deal advisor. Our structured rehab scope system ensures you’re approved for projects that match your experience and capacity.

Initial Advance

Your initial advance is calculated based on deal-specific and borrower-specific factors. Here's what we look at:

• Number of rental or flip projects completed in the last 5 years

• Credit score (minimum 680, preferably 720+)

• Professional credentials (Realtors, General Contractors, Engineers are eligible for higher leverage)

If your contract purchase price is higher than the appraised As Is value, we base the loan on the appraised value.

If your plan is to flip the property, we require a projected gross margin of 30% or more and at least $15,000 in profit. If you’re planning to refinance and hold, we look for a DSCR of at least 1.1 post-repairs.

Properties in remote or rural areas of Hawaii may require more experience (Tier 3 or higher) and will receive limited leverage to protect against liquidity risks in those markets.

Experience-based Tiers

Initial Advance by Tier

* Borrowers with excellent credit and liquidity may be eligible for 85% at Tier 1 on an exception basis.

Adjustments to Initial Advance

Rehab Scope Classification

Rehab Scope Eligibility

LTARV Limits

LTFC Limits

Example: No Experience

• Purchase price: $100,000

• Tier: 1 (no verified experience)

• 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: Full boat

Example: No Experience, Excellent Credit

• Purchase price: $100,000

• Tier: 1 (no verified experience)

• 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: As disbursed

Example: 5 Experience

• Purchase price: $100,000

• Tier: 4 (5 similar verifiable experiences)

• Credit score: 750

• Rehab budget: $20,000

• ARV: $150,000

• Initial advance: $90,000 (90%)

• Construction holdback: $20,000

• Total loan: $110,000

• LTARV: 73.33%

• LTFC: 91.67%

• Interest: As disbursed

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

In certain refinance scenarios, especially common in Hawaii where properties appreciate quickly, you may want to tap into equity based on current value rather than just your cost basis. Our standard lending model prioritizes equity by funding against your actual capital invested — that is, purchase price plus any already incurred renovation costs.

However, if you’re refinancing a seasoned property — say, a triplex in Kaimukī you’ve held for several years — and it’s now worth significantly more, OfferMarket may lend based on the As Is value under the following conditions:

• Property is in livable condition (C4 or better)

• Held for at least 3 years

• Clean payoff statement from the previous lender

• Borrower credit score of 680+

• Experience Tier 3 or higher (minimum of 4 similar verified rehab projects)

• Strong market comps supporting the valuation

• Logical story (i.e., property was rented, tenants moved out, now ready for renovation and resale)

Transactions involving wholesalers, price run-ups

We understand the dynamics of Hawaii's tight-knit investing community where wholesaler deals are common. If your deal includes a markup from a wholesaler or double-close structure, we’ll include the increased cost in your value basis — within limits.

Example:

• A-B Contract (seller to wholesaler): $100,000

• B-C Contract (wholesaler to you): $125,000

• As Is Value: $125,000

• Allowable markup: $20,000 (20% max of original purchase price)

We’ll lend on the higher price as long as:

• The markup doesn’t exceed 20%

• The property wasn’t listed on the MLS

• We receive full A-B and B-C contracts and wholesaler documentation

We do not finance referral fees or non-arm’s length premiums. These deals must be fully documented, legitimate transactions.

Construction Holdback

In Hawaii’s competitive and high-cost renovation landscape, preserving your liquidity is key. Our Construction Holdback helps you do just that. It covers your rehab costs and is disbursed through draw reimbursements as the work progresses.

If you already have the cash and prefer not to use a holdback, that’s fine — we can structure your loan without it. But if you do use it, here’s how it works:

Hawaii investors love our rapid draw processing — often same-day — which helps keep your project on schedule without needing to float large upfront costs.

Appraisal and In-house valuation

A thorough valuation is essential to protect your deal and ours. For properties on the islands, where values vary block by block, we offer several appraisal routes depending on your scenario and experience.

In-house valuation

Even if you qualify, OfferMarket may still require an appraisal based on the risk profile of the property.

Exterior appraisal

An exterior-only appraisal is permitted if your Hawaii investment property is:

• A REO sale

• Foreclosure auction

• Sheriff’s sale

• Online auction

• Bankruptcy sale

The report must be no older than 120 days from your settlement date. If it’s older than 120 but under 180 days, we’ll need recertification.

Interior Appraisal

Any other scenario not mentioned above will require a full interior appraisal.

OfferMarket will order the appraisal through an approved AMC. You’ll simply complete the invoice, and we’ll upload the report directly to your Loan File.

Appraisal Transfer

Already paid for an appraisal with another lender? No problem — we can transfer it as long as:

• It was ordered via AMC

• It’s less than 180 days old at closing

• The lender provides a signed transfer letter certifying AIR compliance

• You share the full report (PDF + XML) and proof of payment

Scenario: Stabilized Hard Money Loan

If your Hawaii property is in great condition (no deferred maintenance, C4 or better), we can underwrite the loan based on its current As Is value and provide up to 75% LTV.

This option is ideal if you're preparing the property for resale or listing it as a rental and don’t need extensive rehab.

Key Loan Details

Extensions

While hard money loans are short-term by design, sometimes you need more time — especially with Hawaii’s slower permitting cycles or unexpected island logistics. Extensions are available but should be used sparingly.

Avoid delays by planning for:

• Contractor availability

• Local permit timelines

• Clean title access (i.e. no lingering tenants or liens)

• Market shifts that impact exit strategy

Extension Limits

Extension Terms and Fees

Before requesting an extension, make sure your insurance policy is current and active through the new maturity date.

Ineligible Property Types

To ensure quality underwriting and limit risk exposure, our Hawaii hard money loan program does not support certain property types. Regardless of the island — from Oʻahu to Molokaʻi — if the asset falls into any of the categories below, it is not eligible for financing through this program:

• Mixed use (i.e., retail below, residential above)

• Multifamily with 5+ units

• Condotels (common in Waikīkī high-rises)

• Co-ops

• Mobile or manufactured homes

• Commercial buildings

• Cabins or log homes (often found in more rural areas like Volcano, HI)

• Properties with oil/gas leases

• Working farms, ranches, or orchards

• Seasonal vacation rentals (i.e., short-term Airbnb-only listings)

• Unpaved access roads

If your Hawaii property falls into one of these categories, reach out — we may still offer options through our alternative lending programs.

Exception Scenarios

We strive to be flexible where possible. If your Hawaii deal includes any of the following characteristics, it may be considered an exception — reviewed on a case-by-case basis:

• Guarantor credit score between 660–679

• Leasehold properties (common in parts of Honolulu and Maui)

• Single-family homes sized 500–699 SQFT

• 2–4 unit properties with any unit below 500 SQFT

• Loans based on As Is value exceeding cost basis

• Non-arm’s length transactions (i.e., family members involved)

• Financed interest payments

• Unusual ownership or title scenarios

We evaluate each file holistically and work to provide options that align with your experience and the project’s potential.

Borrower and Guarantor Requirements

Credit and Background Items

We use a full tri-merge credit report and background screening to ensure our Hawaii-based borrowers meet minimum standards. Here’s how we review your file:

• Credit Scores:

  • 3 scores: middle score

  • 2 scores: lower score

• Mortgage history:

  • No mortgage tradelines → 6 months reserves

  • Fewer than 5 tradelines → 6 months reserves

• Bankruptcy or foreclosure:

  • Must be 4+ years old to be considered

  • If between 4–7 years → 3 months reserves

• Late mortgage payments:

  • Subject to review with Letter of Explanation (LOE)

• Judgments, tax liens, or child support arrears:

  • Must be resolved before funding

• Pending legal actions:

  • Civil: reviewed case by case

  • Criminal: ineligible if financial or serious in nature

Interest Reserves

To keep your Hawaii rehab project moving smoothly and protect your liquidity, we sometimes apply interest reserves — especially for borrowers with limited credit history or experience.

These reserves are escrowed and applied to your interest as it accrues. You don’t need to make monthly payments until reserves are depleted.

Financed Interest Payments

If you're undertaking a major renovation in Hilo or Līhue and want to keep more cash on hand, you may qualify to finance your interest. That means instead of making monthly payments, your accrued interest is rolled into the final payoff.

Example:

• Loan amount: $100,000

• Rate: 12%

• Held: 9 months

• Accrued interest: $9,000

• Final payoff: $109,000 (principal + interest)

This option is ideal when you're focused on project execution and prefer to defer carrying costs.

Property Sourcing Guidelines

Hawaii’s market is unique, and so are our requirements when you bring us a deal. Here’s what we ask for depending on your situation:

• New market: Must submit GC agreement or explain why one isn’t needed

• Wholesale or price jumps: Provide A-B and B-C contracts

• Major renovations or conversions: Architect/engineer letter or permit

• Required docs:

  • Purchase contract

  • Settlement statement (if refinancing)

  • Payoff letters

  • Track record

  • Formation documents for your LLC

The clearer your file, the faster we can fund.

Insurance Guidelines for Hard Money Loans

Your Hawaii property — whether mid-rehab or awaiting resale — must be insured properly. That includes both the physical structure and liability protection. Builders Risk policies are required and must meet these thresholds:

Coverage Details

💡 Pro tip: Install smoke detectors, locks, and cameras right after acquisition to comply with insurance terms — especially vital in vacant or remote Hawaii properties.

Frequently Asked Questions About Hawaii Hard Money Loans

Where does OfferMarket fund hard money loans?

We lend in Hawaii and 40+ other states. In a few restricted states, we refer you to a licensed capital partner.

Can I have multiple hard money loans at once?

Absolutely. Many of our Hawaii investors juggle multiple flips or rentals. If we feel it stretches your liquidity, we’ll let you know and work together to manage risk.

Are hard money loans considered commercial loans?

Yes. Even if you're fixing up a single-family home in Honolulu, the loan is for business purposes — so it's classified as commercial.

What’s the minimum loan amount?

$25,000.

What property types are eligible?

Non-owner occupied residential: single-family, 2–4 unit multifamily, condos, and townhomes.

How is Loan-to-Value (LTV) calculated?

Most Hawaii investors use Loan-To-After-Repair Value (LTARV):
LTARV = (Initial Advance + Holdback) / ARV

What are the credit requirements?

Minimum 680 FICO. Exceptions 660–679 considered. Only guarantors are reviewed.

Is experience required?

No, but it helps. More experience = more leverage. Your tier is based on similar completed projects.

Does wholesaling count toward experience?

No — only actual ownership and project execution qualifies.

What documentation is needed?

Our streamlined Loan File system guides you through everything, and stores reusable docs for future applications.

Purchase Transaction Requirements

When purchasing a property in Hawaii — whether it’s a fixer-upper in Wahiawā or a duplex in Hilo — you'll complete the “Purchase” section of your Loan File. Here’s what you’ll need:

Refinance Transaction Requirements

If you’re refinancing a property in Hawaii — say, cashing out a successful flip in Wailuku or taking equity from a seasoned rental in Kailua — the “Refinance” section of your Loan File is what you’ll complete. Here's what to include:

Are there special requirements for loans over $1M?

Hawaii’s property values are among the highest in the nation, especially in areas like Honolulu, Lahaina, and Kakaʻako. For loans over $1 million (up to our $2M max), we apply enhanced guidelines to ensure stability and success:

If your Maui or Big Island investment requires a jumbo hard money loan, we’ll work with you closely to ensure the deal structure supports long-term success.

Glossary of Key Terms

Get Your Instant Hawaii Hard Money Loan Quote

OfferMarket Capital LLC is your go-to source for private lending in Hawaii, specializing in hard money and DSCR loans for 1–4 unit residential properties. Whether you’re acquiring a triplex on Maui, refinancing a rental in Kaneohe, or flipping an estate in Kona — we’re ready to help.

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