Hard Money Loan Kentucky

Last updated: May 9, 2025

At OfferMarket, we’re here to help you grow your real estate wealth right here in the Bluegrass State. Our all-in-one investor platform gives you the tools and financing you need to succeed in Kentucky’s dynamic property market:

💰 Private lending
☂️ Competitive insurance rate shopping
🏚️ Access to off-market properties

Our Hard Money Loan program is crafted for speed, reliability, and affordability—perfect for acquiring, refinancing, or upgrading 1 to 4 unit investment properties in cities across Kentucky, from Louisville to Lexington and everywhere in between.

Whether you’re flipping houses in Bowling Green or building a rental portfolio in Owensboro, our goal is to help you fund your vision and grow your returns.

Let’s walk through what makes the OfferMarket Hard Money Loan Program stand out in Kentucky.

What is a hard money loan?

A hard money loan in Kentucky is a short-term, asset-backed loan used to purchase, refinance, and renovate residential properties with 1 to 4 units. Investors typically use these loans to turn a profit through flipping or retain the asset for long-term rental income.

You might hear these referred to as “bridge loans” or “fix and flip loans.” Regardless of the name, the strategy remains the same: capitalize on short-term financing to create long-term wealth.

Hard money loan scenarios

Here are common Kentucky real estate scenarios where a hard money loan comes into play:

• Buying and rehabbing a dated property—ideal for investors who prefer to use less cash upfront

• Refinancing a cash purchase to unlock capital and complete renovations

• Replacing an expiring loan on a project still under construction

• Acquiring a home at below-market pricing with no plans to renovate—flipping AS IS

• Pulling equity from a cash deal to fund another opportunity

• Refinancing a completed renovation when more time is needed to rent or sell

How it works

A hard money loan from OfferMarket in Kentucky has two parts:

• Initial Advance – The upfront funding used for the property purchase, wired directly to title at settlement.
• Construction Holdback – Rehab funds reimbursed through draw requests as work is completed.

These loans are flexible. Some Kentucky investors skip the rehab holdback and only take the purchase advance, while others pay cash for a property and only use the construction draw.

You can tailor your funding mix depending on your strategy—flip or BRRRR (Buy, Rehab, Rent, Refinance, Repeat). In cities like Covington, where resale values are rising, you might plan to flip. In markets like Frankfort with strong rental demand, refinancing into a DSCR loan might make more sense.

Your plan can shift with the market. Maybe you expected to hold and rent but local comps make a flip more appealing. Or maybe you planned to sell but discover solid cash flow potential. That's why we recommend structuring your Kentucky real estate projects with flexible exits.

Who uses hard money loans?

In Kentucky, our borrowers fall into two key categories:

• Fix and flip investors – Renovating for resale

• Buy and hold investors – Leveraging BRRRR to build rental portfolios

Many seasoned Kentucky real estate investors mix these strategies depending on property location, rehab costs, and local market conditions. This hybrid approach is common and often leads to stronger returns.

Hard Money Loan Program Guidelines

Project Eligibility

We’re deeply committed to helping Kentucky investors manage risk and succeed. Our default rate across all loans sits below 0.5%, and that’s because we work closely with you as a financing partner—not just a lender.

In Kentucky, novice investors considering heavy or extensive renovations face more project risk—especially with economic fluctuations and permitting delays. Our role is to guide and fund projects that align with your experience and the market realities in cities like Louisville, Paducah, and Elizabethtown.

We use a structured system to classify your renovation scope and determine eligibility based on that scope.

Initial Advance

Your initial advance is based on multiple factors: credit, project history, and the value of the property you’re purchasing in Kentucky. You’ll get more leverage if you’re a licensed Realtor, General Contractor, or Professional Engineer. Higher credit scores also give you better terms.

If your contract purchase price exceeds our determined As Is value, the initial advance is capped by our valuation—not the contract.

Exit strategy also matters. For a flip, we want to see at least a 30% profit margin and a minimum of $15,000 net. If you’re aiming to rent and refinance, your DSCR post-renovation must be at least 1.1. Our Fix and Flip Calculator and DSCR Calculator can help you run the numbers.

For rural Kentucky deals—such as properties in counties like Jackson or Elliott—expect a more conservative approach. We’ll require more experience and offer lower leverage due to market liquidity challenges.

Experience-based Tiers

Initial Advance by Tier

*85% is available as an exception for high-credit, high-liquidity borrowers.

Adjustments to Initial Advance

Rehab Scope Classification

We use a clear classification system to define the intensity of your rehab project. This helps manage risk and ensures your Kentucky hard money loan is aligned with your capacity and market dynamics.

Note: In lower-cost areas of Kentucky—like Eastern KY counties—projects with a low purchase price and high rehab budget may qualify as "lopsided deals" with specific limits.

Rehab Scope Eligibility

We advise Kentucky investors to focus on light and moderate rehabs—especially for quicker turnaround and minimized risk. In cities like Richmond or Hopkinsville, cosmetic updates can yield strong ROI with less complexity.

LTARV Limits

Loan-To-After-Repair-Value maximums are based on your experience and project type.

LTFC Limits

Loan-To-Full-Cost limits apply when your rehab budget exceeds the purchase price.

Example: No Experience – Kentucky Investor

• Purchase price: $100,000

• Tier: 1 (no verifiable 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 accrual: Full boat

Example: No Experience, Excellent Credit

• Credit score: 750

• Initial advance: $80,000 (80%)

• LTARV: 69.33%

• LTFC: 83.9%

• Interest accrual: As disbursed

Example: Experienced Kentucky Investor (Tier 4)

• Experience: 5 similar rehabs

• Initial advance: $90,000 (90%)

• Rehab budget: $20,000

• Total loan: $110,000

• LTARV: 73.33%

• LTFC: 91.67%

• Interest accrual: As disbursed

Refinance Using As Is Value Instead of Cost Basis for Initial Advance

If you’re a Kentucky investor refinancing a seasoned property—say in Lexington or Ashland—that’s worth more now than when you bought it, we may use the updated As Is value to determine your initial advance. However, specific conditions must be met:

• The property must be habitable (condition rating C4 or better)

• At least 3 years must have passed since your original purchase

• No delinquency fees, defaults, or excessive extension charges on your current loan

• Credit score must be 680+

• Minimum Tier 3 experience (4+ successful rehabs)

• Strong appraisal comps that support the higher value

• Legitimate scenario (e.g., tenant moved out and you’re preparing to renovate and sell)

This is a great tool if you bought a property in Louisville, rented it for years, and now want to unlock capital for upgrades or resale.

Wholesaler and Assignment Fee Transactions

We understand that Kentucky has an active network of wholesalers—especially in places like Florence, Elsmere, and Radcliff. If you’re purchasing through a wholesaler with an assignment fee or double close, we allow part of that markup in your value basis if:

• The total markup doesn’t exceed 20% of the A-B contract price

• It’s an arm’s-length transaction

• The deal wasn’t listed on the MLS

• Full documentation is submitted (all contracts, assignments, and wholesaler entity documents)

Example:

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

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

• Value basis we’ll use: $120,000

• $5,000 overage must be covered by you

We do not finance referral or finder’s fees.

Construction Holdback

The rehab portion of your Kentucky hard money loan is reimbursed through a draw process. You’ll get funding in stages as work is completed on your property in areas like Shelbyville, Pikeville, or Georgetown.

If you’d rather float the rehab costs yourself, you can elect to skip the construction holdback.

Loans over $100,000 only accrue interest on the funds you’ve drawn (“as disbursed”), which improves your cash flow during the project.

Appraisal and In-House Valuation

Every Kentucky hard money loan requires a valuation. Depending on your location and experience, we may use an appraisal or an in-house valuation.

In-House Valuation

Exterior Appraisal

Used when acquiring Kentucky properties through REO sales, sheriff’s auctions, or bankruptcies. Appraisal must be dated within 120 days of settlement (or recertified if 120–179 days old).

Interior Appraisal

Required in all other scenarios. Forms based on property type:

• SFR: 1004 + 1007 with ARV

• 2–4 Unit: 1025 + 216 with ARV

• Condo: 1073 + 1007 with ARV

If you already ordered an appraisal through another AMC, we may accept a transfer if it meets our transfer guidelines and certifications.

Appraisal Transfer

OfferMarket accepts transferred appraisals under specific conditions. This is useful if you’ve already paid for an appraisal and want to avoid ordering a new one. However, to ensure compliance and data integrity, the following criteria must be met:

Eligibility Requirements

1. Ordered by an Approved AMC

   • The original appraisal must have been ordered through an Appraisal Management Company (AMC) that meets Appraiser Independence Requirements (AIR).

2. Recent Appraisal

   • Must be less than 180 days old at the time of loan closing.

   • If the appraisal is between 120 and 179 days old, it must be recertified by the original appraiser.

3. Transfer Letter

   • The transferring lender must provide a signed letter certifying:

     “Lender certifies that the Appraisal was ordered and processed in compliance with the Appraiser Independence Requirements (AIR).”

You must submit the following for a valid appraisal transfer:

• Appraisal report (PDF format)

• Appraisal report (XML format)

• Signed transfer letter with AIR compliance language

• Invoice confirming appraisal was paid in full

If all documentation is complete and acceptable, OfferMarket will adopt the appraisal, avoiding extra cost or delay for you.

Important Notes

• The appraisal must reflect accurate and relevant Kentucky market comps, especially for smaller cities or rural areas.

• OfferMarket reserves the right to require a new appraisal or additional review if the transferred report doesn’t meet their underwriting standards.

Scenario: Stabilized Hard Money Loan

If your property in Kentucky—perhaps in Frankfort, Somerset, or Danville—is already in decent shape (C4 condition or better), OfferMarket can underwrite based on its As Is value, without requiring a full rehab plan. This is known as a stabilized hard money loan.

This is ideal for Kentucky investors looking to rent or sell without performing a full renovation.

Key Loan Details

Extensions

Hard money loans are designed to be short-term, with most Kentucky investors completing projects and repaying within 12 months. However, delays can happen. If needed, you can request an extension—but it’s not ideal.

Avoid Delays By:

• Choosing experienced general contractors

• Avoiding aggressive rehab scopes

• Ensuring quick access to the property (no tenants or legal delays)

• Picking projects with multiple exit strategies (sell or refinance)

Extension Limits

Extension Fees

Insurance must remain active during the extension period.

Ineligible Property Types

OfferMarket does not fund the following property types in Kentucky or any other state:

• Mixed use

• 5+ unit multifamily

• Condotels

• Co-ops

• Manufactured or mobile homes

• Commercial (retail, office, industrial)

• Cabins or log homes

• Properties with oil/gas leases

• Operating farms, orchards, ranches

• Vacation/seasonal rentals

• Luxury/exotic builds

• Homes on unpaved roads

Exception Scenarios

OfferMarket recognizes that not all deals in Kentucky fit neatly into the standard box. If you have a compelling opportunity, we may still fund your project under our exception-based underwriting. These scenarios are reviewed on a case-by-case basis.

These exceptions are particularly useful for Kentucky markets with older housing stock or lower square footage norms—such as Newport, Hazard, or parts of rural Western Kentucky.

If your deal doesn’t qualify under the standard guidelines but has strong fundamentals, OfferMarket may still be able to structure the right hard money loan for you.

Borrower and Guarantor Requirements

To qualify for a Kentucky hard money loan with OfferMarket, here’s what you need:

Liquidity Verification

To help you invest confidently in Kentucky real estate, we verify that you or your guarantors have enough liquidity to safely close the deal and support the project. This is a core risk management principle that allows us to maintain one of the lowest default rates in private lending.

We require proof that you control at least:

Estimated cash to close + 25% of your rehab budget

Eligible Liquid Assets

We count the following accounts and assets as eligible liquidity sources:

• Personal checking or savings accounts

• Business bank accounts (including the borrowing entity)

• Other entity-owned bank accounts (must submit operating agreement)

• Personal brokerage accounts

• Business or entity brokerage accounts

• Retirement accounts (50% credit applied due to restrictions)

Important notes:

• You do not need to transfer funds—just document that you control them.

• New accounts are accepted without a seasoning requirement.

• A Letter of Explanation (LOE) may be required for any large deposits.

Credit and Background Considerations

Interest Reserves

Interest reserves are funds collected at closing and held in escrow to cover a portion of your interest payments. These reserves are drawn down automatically each month before you begin making payments from your own bank account. For many Kentucky investors, this offers helpful breathing room during the early stages of a project.

Whether you're renovating a duplex in Covington or flipping a townhouse in Louisville, your required reserve amount depends on credit and background profile.

OfferMarket uses your tri-merge credit report to evaluate your reserve requirement. Strong credit and a clean history will lower your upfront reserve obligations.

Financed Interest Payments

In certain cases, you can opt for financed interest—meaning your interest payments are deferred and rolled into your final payoff. This is helpful for Kentucky investors preserving cash during active renovations.

Example:

• Loan: $100,000

• Interest: 12%

• Duration: 9 months

• Accrued interest: $9,000

• Final payoff: $109,000

Property Sourcing Guidelines

To maintain a high standard across our lending portfolio, OfferMarket applies consistent documentation and risk review processes for all Kentucky properties.

Key Considerations

• New market investments require a General Contractor agreement or a Letter of Explanation if self-managed

• Transactions with rapid price increases, such as wholesaler markups or assignment contracts, are reviewed closely

• Projects involving condo conversions, heavy renovation, or structural modifications may require licensed architectural or engineering support

Required Submissions

• Signed purchase contracts

• Settlement statements (where applicable)

• Payoff letters (for refinances)

• Scope of work and budget

• Track record (if claiming rehab experience)

• Entity formation docs (articles of organization, operating agreements, etc.)

Insurance Guidelines for Hard Money Loans

Proper insurance is essential to protect your Kentucky investment property. OfferMarket requires a specialized Builders Risk policy, often referred to as Fix and Flip insurance, designed specifically for properties under renovation or vacant.

Coverages and Limits

Policy Requirements

💡 Pro tip for Kentucky borrowers: As soon as you take possession of your property, install smoke detectors, locks, and security cameras to avoid any insurance claim denials.

Frequently Asked Questions (FAQ) – Kentucky Edition

What states does OfferMarket fund hard money loans?

OfferMarket lends in most U.S. states, and Kentucky is fully covered under our direct lending program. That means fast quotes, smooth closings, and a fully supported experience across all Kentucky cities and counties.

We also operate in states like Alabama, California, Florida, Texas, and New York — but if a state requires an NMLS license or we don’t lend directly, we partner with licensed capital providers through our rate-shopping platform.

Kentucky is an eligible direct lending state.

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

Yes. It’s common for Kentucky investors to have multiple active hard money loans with OfferMarket. Whether you’re flipping properties in Louisville and rehabbing a rental in Bowling Green, we support portfolio-level strategies.

That said, we always review your liquidity and project load. If we believe taking on another loan might overextend your resources or slow execution, we’ll discuss it with you and help you manage risk accordingly.

Are hard money loans considered commercial?

Yes — hard money loans are business-purpose loans, not personal consumer loans. They are structured for investment purposes only and are issued to a business entity (LLC or Corporation), not individuals.

Even though the collateral is residential (1–4 units), the loan is considered commercial and is not subject to consumer lending regulations.

What is the minimum loan amount?

The minimum loan size is $25,000. This applies across Kentucky, including for lower-cost markets where acquisition prices are often more affordable.

Which property types are eligible?

We fund non-owner occupied residential properties with 1 to 4 units, including:

• Single-family homes

• Duplexes, triplexes, and quadplexes

• Condominiums

• Townhouses

• Planned Unit Developments (PUDs)

Not eligible: Mixed-use, mobile homes, co-ops, condotels, and commercial buildings. For 5+ unit multifamily or mixed-use deals, we offer separate programs.

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

In hard money lending, we focus primarily on Loan-to-After-Repair-Value (LTARV) and sometimes Loan-to-As-Is-Value (LTV) depending on the scenario.

• Initial Advance: Based on the lower of the contract purchase price or As Is appraised value

• LTARV: Calculated as (Initial Advance + Construction Holdback) ÷ After Repair Value (ARV) from our appraisal or valuation

We also assess Loan-to-Full-Cost (LTFC) for extensive rehabs or “lopsided” deals.

What are the credit requirements?

We require a minimum FICO score of 680 for all guarantors. Borrowers with 660–679 may be considered as exceptions if other criteria (liquidity, reserves, experience) are strong.

• We only review credit scores for individuals personally guaranteeing the loan

• If a member of your LLC is not a guarantor, their score will not be considered

What are the experience requirements?

No experience is required to qualify for a Kentucky hard money loan. However, more experience equals:

• Higher leverage

• Better LTARV limits

• Larger initial advances

• Eligibility for heavier rehab scopes

We track experience using completed and verifiable rehab projects within the last 5 years.

Does being a wholesaler count toward experience?

No. While wholesaling can be valuable, it doesn’t involve risk of capital or project execution — both of which are critical for underwriting.

Only projects where you were financially responsible for the rehab and exit strategy (flip or rental refinance) count toward your experience tier.

What documentation is required?

OfferMarket’s streamlined Loan File system makes applying for a hard money loan in Kentucky fast and straightforward. Your documents are securely stored for future transactions, making follow-up deals even easier.

Purchase Transaction Requirements

Refinance Transaction Requirements

Are there special requirements for loans over $1M?

Yes. For larger deals in Kentucky, up to our $2,000,000 limit, we apply a more detailed underwriting process:

Glossary of Key Terms

Here’s a reference for commonly used terms in our Kentucky hard money lending program:

Instant Hard Money Loan Quote – Kentucky

OfferMarket Capital LLC is a trusted private lender serving real estate investors across Kentucky. From distressed flips in Northern Kentucky to stabilized rental refinances in Central Kentucky, our mission is to help you fund your next deal with confidence.

Our free platform gives you access to:

💰 Private lending
☂️ Insurance rate shopping
🏚️ Off market properties
💡 Market insights

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