Hard Money Loan Minnesota

Last updated: May 13, 2025

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OfferMarket is not NMLS licensed in Minnesota. To serve real estate investor clients in Minnesota, 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 dedicated to helping Minnesotans unlock wealth-building opportunities through real estate. Whether you’re flipping properties in Minneapolis, building rental portfolios in St. Paul, or renovating distressed homes across the Land of 10,000 Lakes, we offer an all-in-one platform to support your journey:

💰 Private lending
☂️ Insurance rate shopping
🏚️ Off-market properties

Our Minnesota Hard Money Loan program is tailored for fast, reliable, and competitively priced financing to acquire, refinance, and upgrade 1-4 unit residential investment properties throughout the North Star State.

Whether your end game is to fix and flip for a quick return or hold and refinance into a DSCR loan for passive income, we’re excited to be a strategic partner in your investment success.

Let’s explore the OfferMarket Hard Money Loan program in Minnesota!

What is a hard money loan?

A hard money loan is a short-term financing solution secured by residential real estate (1-4 units). It’s commonly used in Minnesota to purchase, renovate, or refinance investment properties — particularly those needing rehab — to either resell for profit or convert into long-term rentals.

These loans are frequently known by other names like “bridge loans” or “fix and flip loans,” especially among Minnesota’s active real estate investing community and private lending circles.

Hard money loan scenarios

Across Minnesota, real estate investors rely on hard money loans for the following situations:

• Buying and renovating a distressed or outdated home — say a fixer-upper in Duluth or Rochester — using leverage rather than all cash.

• Refinancing a cash-purchased home to pull out equity and begin renovations — for instance, a fast-close deal in Mankato that now needs funds for upgrades.

• Refinancing an existing loan on a partially rehabbed property — when your current lender needs to be repaid but you still have work to finish before selling or renting.

• Purchasing a property with no planned rehab — such as buying below-market properties in Saint Cloud to resell as-is.

• Refinancing an as-is cash purchase — allowing you to extract equity for your next investment.

• Refinancing a completed rehab to extend your timeline — giving you more breathing room to sell or transition to a rental loan.

How it works

Minnesota hard money loans are built with two key components:

• Initial Advance – This portion of the loan covers part of the property’s purchase price and is disbursed to the title company at settlement.
• Construction Holdback – This segment funds your renovation and is reimbursed in draws as you complete work.

You have the flexibility to use both components together, or just one — depending on your needs. Most Minnesota investors opt for both to stretch their capital further. However, some prefer to fund their own renovations or aren’t planning improvements, using only the initial advance.

Others who buy properties outright with cash might only use a construction holdback to fund a full rehab — up to 100% of their budget.

Your strategy might be to flip for profit or refinance into a long-term DSCR loan. It’s normal to pivot once you’re into the project. For example:

You might plan a BRRRR in Bloomington, but after the rehab, realize that market demand makes a quick sale more profitable.

Or perhaps you bought with plans to flip in Eden Prairie, but the market cools. Renting and refinancing into a low-prepay DSCR loan gives you time to wait for better sales conditions.

That’s why we emphasize picking properties with dual exit strategies — it gives you flexibility and helps manage risk.

Hard Money Loan Program Guidelines

Our Minnesota Hard Money Loan Program offers flexible, performance-driven financing to support your real estate investments across the Twin Cities and beyond. Whether you're flipping a house in Edina or renovating a triplex in Moorhead, our loan terms are designed to accommodate your needs.

Project Eligibility

Our mission is to help you build long-term wealth through smart real estate investing in Minnesota. That means our top priority is helping you manage risk effectively. With fewer than 0.5% of our loans ever requiring foreclosure, our track record is a testament to our rigorous standards and investor-first approach.

In cities like Burnsville, Maplewood, and Bemidji, less experienced borrowers can sometimes take on high-risk rehab projects without realizing the hidden challenges. These "heavy" or "extensive" rehabs often encounter setbacks, unexpected costs, or unfavorable market shifts — even seasoned investors in Minnesota markets like Duluth or Rochester can run into issues during periods of economic uncertainty.

That’s why we function not just as your capital provider, but as your deal partner — helping you analyze risk and structure a winning strategy. We’ve created a structured rehab scope classification system, and your eligibility for certain loan amounts is based on this system, along with your experience.

Initial Advance

Your initial advance is based on both borrower-specific and deal-specific criteria. If you're investing in Minneapolis or a rural part of southern Minnesota, we assess your track record to determine how much of the purchase price we’ll cover.

Here’s what we evaluate:

• Number of investment properties owned in the past 24 months

• Number of comparable verified rehab projects completed in the past 5 years

• Minimum credit score of 680 (720+ preferred)

• Professional qualifications (we offer increased leverage to Realtors, General Contractors, and Licensed Engineers)

If the purchase price exceeds the appraised As Is value, we’ll base our advance on the valuation, not the contract.

Exit strategy affects advance limits too. For a sale exit:

• Must show a minimum gross margin of 30% and projected profit of at least $15,000.

For a refinance exit (or if your flip scenario doesn’t qualify for your preferred amount):

• Must show a post-repair DSCR of at least 1.1.

Rural properties (such as those in Northern Minnesota) require a minimum Tier 3 experience and will receive a limited advance.

Experience-based Tiers

Initial Advance by Tier

(*Exception: 85% available for Tier 1 borrowers with excellent credit and liquidity.)

Adjustments to Initial Advance

Rehab Scope Classification

(*“Lopsided” means the As Is value or purchase price is less than the rehab budget.)

Rehab Scope Eligibility

LTARV Limits

LTFC Limits

An LTFC of 85% means that for high-risk projects (i.e. when the rehab budget is higher than the purchase price), we’ll cover 85% of the project cost and the borrower contributes 15%.

Example: No Experience

• Purchase price: $100,000

• Tier: 1 (no rehab 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

• Purchase price: $100,000

• Tier: 1 (no rehab 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 accrual: As disbursed

Example: 5 Experience

• Purchase price: $100,000

• Tier: 4 (5 verifiable rehab projects completed)

• 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

This scenario is quite common for experienced Minnesota investors operating in higher-demand neighborhoods in Minneapolis, Minnetonka, or Woodbury, where solid ARV projections and smooth rehabs are the norm.

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

While we typically structure our loans around your cost basis (purchase price + rehab costs), there are Minnesota-specific situations — particularly with long-held rentals in cities like Bloomington or Duluth — where the As Is value exceeds the cost basis.

If you're looking to refinance and the property meets certain conditions, we may allow the initial advance to be based on the As Is value. Here’s what we require:

• Property must be habitable (C4 condition or better)

• Seasoning of 3+ years (i.e., you've owned the property for at least three years)

• No default interest, extensions, or late fees on payoff statement

• Minimum credit score: 680

• Experience Tier: 3 or higher (4+ verifiable rehabs)

• Strong neighborhood comps to justify the As Is value

• Clear and supportive investment story (e.g., unit was rented for 3 years, tenant moved out, now needs renovation for resale)

This scenario is ideal for seasoned Minnesota landlords with properties in stable markets like Eagan or Plymouth who are preparing their rentals for resale or refinancing.

Transactions involving wholesalers, price run-ups

If you’re purchasing a property via a wholesaler in Minnesota — a common approach in suburban markets like Maplewood or Inver Grove Heights — we’ll consider including the assignment fee in your value basis for the initial advance. However, we enforce specific guidelines:

Example:

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

• B-C Contract (assignment): $25,000

• As Is Value: $125,000

• Value basis for initial advance: $120,000

Wholesaler Transaction Guidelines:

• We include the assignment fee or double-close markup in your cost basis up to 20% of the A-B price.

• If the property was listed on the MLS, we may exclude the fee from financing.

• Full contract chain (A-B and B-C) is required, along with the wholesaler's operating agreement.

• Finder’s fees and referral fees are not eligible for financing.

• Transaction must be arm’s length.

Construction Holdback

The construction holdback is the part of your loan set aside for the rehab phase and disbursed through draws as you complete the work. For example, if you’re flipping a fourplex in Saint Cloud or rehabbing a lakeside cabin near Brainerd, you’ll be reimbursed for progress based on your submitted scope of work.

If you prefer to self-fund the renovation and want to avoid a holdback altogether, you can opt out — particularly useful for investors with strong liquidity.

For loan amounts above $100,000, you’ll only pay interest on drawn funds (as disbursed).

This streamlined process is ideal for Minnesota investors who want quick access to funds to keep their projects moving on schedule.

Appraisal and In-house valuation

Every hard money loan in Minnesota requires a valuation. Depending on the property type and scenario, we may require a third-party interior appraisal, exterior appraisal, or an in-house valuation — particularly for properties in core markets like Minneapolis, Saint Paul, or Rochester.

In-house valuation

We may still require an exterior or interior appraisal at our discretion, even if you meet these in-house valuation criteria.

Exterior appraisal

Allowed in situations such as:

• REO sale

• Foreclosure auction

• Sheriff’s sale

• Online auction

• Bankruptcy sale

Appraisals must be dated within 120 days of closing. If dated between 120 and 179 days, a recertification is required.

Interior appraisal

All other scenarios will require a full interior appraisal with specific form requirements:

We handle appraisal ordering via our preferred AMC and will provide the invoice link. The loan process will be paused if the invoice isn’t paid.

Appraisal transfer

If you've already had an appraisal ordered through a licensed AMC (within 180 days), we can transfer it, provided you submit:

• A signed transfer letter certifying AIR compliance

• The PDF and XML of the report

• The appraisal invoice marked as paid

Scenario: Stabilized Hard Money Loan

In Minnesota, if your property is already in strong shape — with no deferred maintenance and a condition rating of C4 or better — we can fund up to 75% of the current As Is value. This is what we refer to as a stabilized hard money loan, ideal for properties in turnkey condition, such as those ready to rent or list on the market immediately.

This option is especially beneficial for investors holding recently renovated units in cities like Richfield or Golden Valley who want quick access to liquidity or need bridge financing.

Key Loan Details

We fund a wide variety of non-owner-occupied residential investment properties across Minnesota, from suburban duplexes to urban fourplexes. Here are the essential program criteria:

Note: While Minnesota is currently a referral state for us (see geographic restrictions above), we help investors secure funding through licensed capital providers and offer rate shopping services for hard money loan Minnesota requests.

Extensions

Hard money loans are designed to be short-term solutions — typically 12 to 24 months. Most Minnesota borrowers repay their loans well before maturity. However, life happens — delays, unexpected costs, or shifting market conditions may cause you to need more time.

We recommend avoiding extensions whenever possible because:

• Extension fees apply

• Interest continues to accrue

• Risk of foreclosure increases if the loan is unpaid after the extension limit

To help you avoid these pitfalls, we encourage you to steer clear of:

• Hiring underqualified contractors

• Taking on large rehab scopes beyond your experience

• Investing in markets with slow permitting (like certain areas of rural Minnesota)

• Properties with tenant access issues or leasehold restrictions

• Projects without flexible exit strategies

Being proactive in managing these risks will help keep your loan on schedule and profitable.

Extension Limits

Extension Terms and Fees

To extend your loan, your builder’s risk insurance policy must be active through the full extension period.

Ineligible Property Types

For the Minnesota hard money loan program, certain types of properties are not eligible for financing:

• Mixed-use buildings

• Multifamily buildings with 5+ units

• Condotels and co-ops

• Mobile or manufactured housing

• Commercial real estate (retail, office, etc.)

• Cabins or log homes

• Properties with oil or gas leases

• Active farms, orchards, or ranches

• Vacation or seasonal rental homes

• Luxury or exotic properties

• Properties accessible only by dirt roads or unpaved terrain

These exclusions help us maintain a low default rate and better manage project risk, especially in rural areas or non-standard asset types.

Exception Scenarios

In some cases, OfferMarket offers exceptions to standard guidelines — particularly relevant for experienced Minnesota investors working within unique project constraints. These include:

• Guarantor credit score between 660 – 679

• Leasehold properties (ground rent)

• Smaller single-family homes (500 to 699 sq ft)

• 2–4 unit properties with a unit as small as 400–499 sq ft

• Initial advance based on As Is value exceeding cost basis

• Non–arm’s length transactions

• Financed interest payments

Each of these situations is assessed case-by-case, and approval is at the discretion of our underwriting team.

Borrower and Guarantor Requirements

To qualify for a Minnesota hard money loan, you must meet specific eligibility criteria. Here’s a complete breakdown of the borrower and guarantor requirements:

Liquidity Verification

To safeguard your financial position and ensure you’re well-prepared for project execution, we verify that you — or one or more guarantors — have enough liquid assets to meet:

• Your estimated cash to close, plus

• At least 25% of your rehab budget

These liquidity requirements apply across the board, from urban Minneapolis duplex rehabs to rural Minnesota fix-and-flips.

Eligible liquid assets include:

• Bank accounts in personal name

• Bank accounts in the borrowing entity’s name

• Bank accounts in other business entities (requires operating agreement)

• Brokerage accounts in personal or entity name

• Retirement accounts (IRAs, 401(k)s — subject to a 50% haircut)

Verification process:

• Provide two (2) most recent account statements

• No seasoning required for newly opened accounts

• For large deposits, submit a brief Letter of Explanation (LOE)

You are not required to move funds around or maintain a business bank account — though we recommend it as a best practice for accounting and risk management. The key is simply having verifiable access to liquid capital.

Credit and Background Items

We use the following credit analysis guidelines to determine eligibility and reserve requirements:

• For 3 credit scores, we use the middle score

• For 2 scores, we use the lower

• No mortgage tradelines or <5 tradelines: 6 months of reserves required

• Bankruptcy must be discharged 4+ years prior to closing

• Foreclosure must be completed 4+ years prior

• For bankruptcy/foreclosure between 4–7 years, a minimum of 3 months reserves is required

• Recent mortgage late payments: LOE required; approval at loan committee’s discretion

• Past due balances on any tradeline must be paid before funding

• Involuntary liens or judgments (e.g., tax liens, child support) must be resolved pre-funding

• Pending civil lawsuits: LOE required; subject to review

• Pending or past criminal cases involving financial crime or serious/repeat offenses are not eligible

Interest Reserves

Interest reserves may be required depending on credit score and background. These reserves are applied to your monthly interest payments and held in escrow at closing. This ensures liquidity throughout your project and reduces the risk of default due to missed payments.

Financed Interest Payments

To help Minnesota investors maintain liquidity — especially during intensive rehab phases — you may qualify for financed interest payments. This means instead of paying interest monthly, the accrued interest is rolled into your final payoff amount.

Example:

• Loan amount: $100,000

• Interest rate: 12%

• Loan held for: 9 months

• Accrued interest: $9,000

• Payoff total:

  • Principal: $100,000

  • Interest: $9,000

This structure is ideal for borrowers who prefer to focus on renovations or cash-flow strategy during the project and repay interest at exit.

Property Sourcing Guidelines

When sourcing properties for your Minnesota real estate projects — whether it's a classic four-square in Saint Paul or a single-family in Blaine — it’s important to follow OfferMarket’s submission and documentation standards. This ensures fast and seamless funding.

Key Points:

• If your deal is in a new market (e.g., first time investing in Duluth), submit a General Contractor agreement or LOE explaining why a GC isn’t required.

• For wholesale transactions, previous price increases or non-arm’s length transactions require additional documentation and internal review.

• For condo conversions or projects needing structural work, submit engineering or architectural documentation (or permits, where applicable).

• All submissions must include:

  • Executed purchase contract

  • Settlement statement or payoff letter (for refinance)

  • Rehab track record

  • Operating agreements or formation documents

Being prepared with these documents will keep your loan moving swiftly through our underwriting system.

Insurance Guidelines for Hard Money Loans

Real estate investors in Minnesota know that property protection is non-negotiable. Whether you’re renovating a lakeside property in Brainerd or a duplex in Richfield, you need comprehensive coverage.

This includes Builder’s Risk Insurance, which protects both your structure and liability exposure during construction or vacancy.

Coverages and Limits

Coverage Details

💡 Pro tip: After acquiring a Minnesota property, immediately install smoke detectors, secure entry locks, and set up security cameras. This ensures compliance with insurance terms and protects your investment from preventable loss.

Frequently Asked Questions

What states does OfferMarket fund hard money loans?

• Arizona*
• Alabama
• Arkansas
• California
• Colorado
• Connecticut
• Delaware
• Florida
• Georgia
• Hawaii
• Idaho
• Illinois
• Indiana
• Iowa
• Kansas
• Kentucky
• Louisiana
• Maine
• Maryland
• Massachusetts
• Michigan
• Mississippi
• Missouri
• Minnesota*
• Montana
• Nebraska
• Nevada*
• New Hampshire
• New Jersey
• New Mexico
• New York
• North Carolina
• North Dakota*
• Ohio
• Oklahoma
• Oregon
• Pennsylvania
• Rhode Island
• South Carolina
• South Dakota*
• Tennessee
• Texas
• Utah
• Vermont*
• Virginia
• Washington
• Washington DC
• West Virginia
• Wisconsin
• Wyoming

(*) In states where NMLS license is required for business purpose lending or we do not directly lend, OfferMarket operates as a rate shopping service and refers your loan to a licensed capital provider.

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

Absolutely. It’s common for active Minnesota investors to have multiple projects across cities like Minneapolis, Brooklyn Park, and Eden Prairie. While we support scale, we also help manage your liquidity and execution pace to prevent overextension.

Are hard money loans considered commercial?

Yes. All hard money loans are business-purpose loans and are issued to entities (LLCs, corporations). These are treated as commercial loans, not consumer financing.

What’s the minimum loan amount?

The minimum loan amount is $25,000.

What property types are eligible?

We fund non-owner occupied 1–4 unit residential properties:

• Single-family homes

• Townhomes

• Duplexes, Triplexes, Quadplexes

• Warrantable condominiums

5+ unit multifamily and mixed-use properties are not eligible in this program but may be financed through other OfferMarket channels.

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

• LTV = Loan ÷ As Is Value

• LTARV = (Initial Advance + Construction Holdback) ÷ After Repair Value (ARV)

We base the initial advance on the lower of the As Is value or the contract purchase price. For refinances, we compare the As Is value to your prior closing price plus documented improvements.

What credit score is required?

We require a minimum FICO of 680. Scores between 660–679 may be accepted on an exception basis. Only those guaranteeing the loan are evaluated.

Is real estate experience required?

Not at all. Whether you’re purchasing your first flip in Coon Rapids or your 20th rental in Rochester, we offer experience-based tiering that adjusts leverage and eligibility based on verified track record.

Does wholesaling count as experience?

No. Since wholesalers are not responsible for project completion, wholesaling does not count toward your experience tier.

What documentation do I need?

At OfferMarket, we’ve streamlined the documentation process to support real estate investors across Minnesota — from first-time flippers in St. Cloud to seasoned BRRRR buyers in Rochester. Our Loan File system makes it easy to submit, manage, and reuse documents for future transactions.

Once submitted, your documents are securely stored and reusable across multiple loan requests.

Purchase Transaction Requirements

Refinance Transaction Requirements

Are there special requirements for loans over $1M?

Yes. For projects over $1M, especially in high-value markets like Edina or Wayzata, we require:

Glossary of Key Terms

Instant Hard Money Loan Quote

OfferMarket Capital LLC is your go-to partner for hard money loans in Minnesota — whether you’re targeting cash-flow rentals in Saint Paul or value-add flips in the suburbs.

By becoming a free member of OfferMarket, you’ll unlock:

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

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