Hard Money Loan Texas
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Last updated: May 19, 2025
At OfferMarket, our goal is to empower Texas real estate investors to build wealth and thrive in the Lone Star State’s dynamic property market. To support your investing journey across Texas—from Austin to Houston, Dallas to San Antonio—we provide a comprehensive platform:
💰 Private lending
☂️ Insurance rate shopping
🏚️ Off market Texas properties
Our Texas Hard Money Loan program is crafted to deliver quick, reliable, and affordable financing for the purchase, refinance, and renovation of 1-4 unit residential investment properties throughout Texas.
Whether your plan is to flip your Texas property for profit or hold it as a rental and refinance into a DSCR loan, OfferMarket is ready to be your trusted lending partner to help you succeed in the Texas real estate market.
Let’s dive into the OfferMarket Texas Hard Money Loan Program!
What is a hard money loan?
A Texas hard money loan is a short-term financing solution secured by a tangible asset—in this case, 1-4 unit residential real estate within Texas—to purchase, refinance, and renovate properties for resale or rental income.
Often called “bridge loans” or “fix and flip loans” among Texas investors and private lenders, hard money loans fill the gap where conventional financing may be too slow or unavailable.
Texas Hard Money Loan Scenarios
Hard money loans are ideal in these common Texas real estate scenarios:
Purchasing and renovating older or distressed homes in Texas neighborhoods, allowing investors to conserve cash by financing both purchase and rehab.
Refinancing Texas properties bought with cash to free up capital for renovations or other investments.
Refinancing existing hard money loans on Texas properties to complete rehabs and position for sale or long-term rental.
Acquiring Texas off-market properties below market value without intending rehab, aiming to sell "as-is" for profit.
Refinancing cash purchases in Texas to tap equity for new investment opportunities without rehabbing.
Refinancing completed rehab projects in Texas to hold or resell without renovation needs.
How the Texas Hard Money Loan Works
Your Texas hard money loan will consist of two parts:
- Initial Advance — funds applied toward your Texas property's purchase price, wired directly at closing.
- Construction Holdback — funds reserved for Texas property rehab costs, paid to you incrementally as renovation milestones are verified.
You may choose to use either or both components depending on your Texas project needs. Many Texas investors combine these to maximize leverage and minimize out-of-pocket cash.
Your exit strategy may evolve—flip for profit or refinance into a DSCR loan and rent. Texas’ diverse markets allow flexibility, so no need to rush this choice.
For instance, you might plan a BRRRR (Buy, Rehab, Rent, Refinance, Repeat) strategy in Austin but switch to a flip in Houston if resale conditions are more favorable.
Who Uses Texas Hard Money Loans?
Texas fix-and-flip investors seeking quick capital for timely property acquisition and rehab.
Rental property investors in Texas employing the BRRRR strategy to build cash-flowing portfolios.
Many Texas investors blend these strategies, flipping some properties while holding others for rental income based on market conditions.
Texas Hard Money Loan Program Guidelines
| Criteria | Guideline |
|---|---|
| Loan amount (minimum) | $25,000 |
| Loan amount (maximum) | $2,000,000 |
| ARV (minimum) | $100,000 |
| Experience | Not required |
| Credit score (minimum) | 680 |
| Borrowing entity | LLC or Corporation |
| Initial advance | Up to 90% |
| Construction holdback | Up to 100% |
| LTARV (maximum) | 75% |
| Interest rate | Instant quote |
| Origination fee | 1.5 to 2 points |
| Term | 12 to 24 months |
| Points out | None |
| Prepayment penalty | None |
| Structure | Interest-only with balloon payment |
| Recourse | Full (51% of borrowing entity guarantee) |
| Exit strategy: Sale | Minimum 30% ROI |
| Exit strategy: Refinance | Minimum 1.1 DSCR after repairs |
| Valuation | Appraisal or In-house valuation |
| SqFt (minimum) | Single family: 700+, 2-4 units: 500+ per unit, Condo: 500+ |
| Acreage (maximum) | 5 acres |
| Interest accrual | Under $100k: full boat, Over $100k: as disbursed |
| Advanced draws | Lender discretion |
| Down payment (minimum) | $10,000 |
Project Eligibility in Texas
Our priority is your success and risk management across the Texas market. Only projects aligned with experience and realistic rehab scopes are financed.
Texas real estate investors who undertake heavy rehabs without sufficient experience or liquidity risk delays and cost overruns, especially in rapidly evolving Texas markets like Dallas-Fort Worth or the Texas Hill Country.
We partner with you not just as lenders but as advisors and risk managers to guide your Texas project safely.
Initial Advance
We evaluate your Texas experience, credit, and deal specifics to set your initial advance. Realtors, general contractors, and professional engineers in Texas often benefit from higher leverage.
If the Texas property purchase price exceeds its as-is value per appraisal, your advance is capped at the lower as-is value.
Exit strategy impacts advance levels:
Sale exit requires a 30% minimum gross margin and $15,000 profit projection.
Rent and refinance exit needs a 1.1 minimum DSCR after repairs.
Texas Experience-Based Tiers
| Tier | Verifiable Experience (Texas rehab projects) |
|---|---|
| 1 | 0 |
| 2 | 1 to 2 |
| 3 | 3 to 4 |
| 4 | 5 to 9 |
| 5 | 10+ |
Initial Advance by Tier
| Tier | Initial Advance (% of purchase price) |
|---|---|
| 1 | 80%* |
| 2 | 85% |
| 3 | 85% |
| 4 | 90% |
| 5 | 90% |
*85% possible with excellent credit and liquidity
Rehab Scope Classification
| Rehab Scope | Definition |
|---|---|
| Light | Rehab budget is less than 25% of the purchase price |
| Moderate | Rehab budget ranges from 25% to 49.99% of the purchase price |
| Heavy | Rehab budget is between 50% to 99.99% of the purchase price |
| Extensive | Rehab budget is 100% or more of the purchase price — including additions, expansions, or accessory dwelling units (ADUs), or when the purchase price is very low compared to rehab costs* |
(*) In Texas, “lopsided deals” often occur in rapidly appreciating markets like Austin or Dallas, where the rehab cost exceeds the purchase price significantly. See LTFC Limits below for details on restrictions.
Rehab Scope Eligibility
Your eligibility for various rehab scopes depends on your experience tier and the rehab classification. Given Texas’ diverse real estate environment—ranging from urban hubs like Houston to rural Texas counties—focus on projects with manageable rehab scopes, especially if you’re newer to investing.
| Tier | 1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|
| Experience | 0 | 1-2 | 3-4 | 5-9 | 10+ |
| Light | Eligible | Eligible | Eligible | Eligible | Eligible |
| Moderate | Ineligible | Eligible | Eligible | Eligible | Eligible |
| Heavy | Ineligible | Eligible | Eligible | Eligible | Eligible |
| Extensive | Ineligible | Ineligible | Eligible | Eligible | Eligible |
LTARV Limits
Loan-to-After-Repair Value (LTARV) limits are calibrated to your experience tier and rehab scope to balance risk and reward in the Texas market.
| Tier | 1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|
| Experience | 0 | 1-2 | 3-4 | 5-9 | 10+ |
| Light | 70% | 70% | 75% | 75% | 75% |
| Moderate | Ineligible | 70% | 75% | 75% | 75% |
| Heavy | Ineligible | 70% | 75% | 75% | 75% |
| Extensive | Ineligible | Ineligible | 70% | 70% | 70% |
LTFC Limits
Loan-to-Full-Cost (LTFC) applies to extensive rehab scopes where the rehab budget surpasses the purchase price or As Is value. In Texas, these limits ensure that borrowers have significant equity in projects with higher execution risk, particularly relevant in fluctuating markets like San Antonio or the Rio Grande Valley.
| Tier | 1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|
| Experience | 0 | 1-2 | 3-4 | 5-9 | 10+ |
| Light | N/A | N/A | N/A | N/A | N/A |
| Moderate | Ineligible | N/A | N/A | N/A | N/A |
| Heavy | Ineligible | N/A | N/A | N/A | N/A |
| Extensive | Ineligible | Ineligible | 85% | 90% | 90% |
Example: No Experience, Texas Property
Purchase price: $100,000
Tier: 1 (0 similar verifiable Texas rehab experience)
Credit score: 695
Rehab budget: $24,000
ARV: $150,000
Initial advance: $75,000 (75%)
Construction holdback: $24,000
Total loan amount: $99,000
LTARV: 66%
LTFC: 79.8%
Interest accrual: Full boat
Example: No Experience, Excellent Credit in Texas
Purchase price: $100,000
Tier: 1 (0 similar verifiable Texas rehab experience)
Credit score: 750
Rehab budget: $24,000
ARV: $150,000
Initial advance: $80,000 (80%)
Construction holdback: $24,000
Total loan amount: $104,000
LTARV: 69.33%
LTFC: 83.9%
Interest accrual: As disbursed
Example: 5 Years Experience, Texas Market
Purchase price: $100,000
Tier: 4 (5 similar verifiable Texas rehab 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
Refinancing Using As-Is Value Instead of Cost Basis for Initial Advance in Texas
Texas investors with seasoned properties worth more As-Is than their cost basis may leverage that value for refinancing and renovations. OfferMarket requires these conditions to approve such loans in Texas:
Property must be habitable (condition rating C4 or better), not falling into disrepair.
Property seasoning: 3 or more years owned.
Previous lender payoff statement free from default interest, extension fees, or late charges.
Minimum credit score of 680.
Experience Tier 3+ (at least 4 similar verified rehab projects).
Strong evidence supporting the higher As-Is value, including comparable sales in the Texas neighborhood.
Supportive scenario, e.g., property rented for 3 years, tenants vacated, now ready for renovation and sale.
Wholesaler transactions must comply with Texas-specific documentation and limits.
Construction Holdback in Texas
The construction holdback is disbursed upon draw requests as progress is verified against the rehab scope. Texas investors can choose to forgo the holdback if they have sufficient liquidity to self-fund rehab costs.
Draw processing details:
| Criteria | Guideline |
|---|---|
| Minimum draw amount | None |
| Maximum draw amount | 100% of remaining holdback |
| Minimum number of draws | 0 |
| Maximum number of draws | None |
| Materials delivered but not installed | 50% (with invoice) |
| Draw inspection | App-based (self-serve) |
| Draw turnaround | 0 to 2 business days |
| Draw fee | $270 |
| Wire fee | $30 |
Appraisal and In-House Valuation for Texas Properties
A thorough valuation is required for every OfferMarket hard money loan on Texas properties. Depending on your specific Texas investment scenario, we may request one of the following valuation types:
In-house valuation
| Criteria | Eligibility requirement |
|---|---|
| Property type | Single family, Duplex, Triplex, Quadplex |
| Tier | 4 or higher |
| Credit score | 720+ |
| Rural | No |
| New market | No |
| LTARV | Maximum 70% |
Texas investors who meet the above conditions may qualify for an in-house valuation, which expedites the underwriting process while maintaining accuracy.
Note: OfferMarket reserves the right to require an interior or exterior appraisal based on the property and market characteristics at its sole discretion.
Exterior appraisal
Exterior appraisals are accepted for the following Texas property sales:
REO sales
Foreclosure auctions
Sheriff’s sales
Online auctions
Bankruptcy sales
Exterior appraisals must be dated within 120 days of the loan closing date. If the appraisal is between 120 and 179 days old, recertification of the appraisal is required before closing.
Interior appraisal
For all other Texas transactions not covered by exterior or in-house valuation criteria, a full interior appraisal is necessary:
| Property type | Appraisal forms |
|---|---|
| Single family | 1004 + 1007 ARV including As Is value (non-gridded) |
| 2-4 Unit | 1025 + 216 ARV including As Is value (non-gridded) |
| Condo | 1073 + 1007 ARV including As Is value (non-gridded) |
OfferMarket orders interior appraisals through an approved appraisal management company (AMC). Borrowers are responsible for paying the AMC invoice, which must be settled before loan funding.
Appraisal Transfer
Appraisals not ordered by OfferMarket may be transferred for use, provided the following Texas-specific conditions are met:
Appraisal was ordered via an approved appraisal management company.
Appraisal is less than 180 days old at loan closing.
If 120 to 179 days old, appraisal must be recertified.
Transferring lender provides OfferMarket with:
A signed transfer letter certifying compliance with Appraiser Independence Requirements (AIR).
Full appraisal report in PDF and XML formats.
Appraisal invoice showing payment has been made.
Stabilized Hard Money Loan
For Texas properties without deferred maintenance and with an appraisal condition rating of C4 or better, OfferMarket will appraise the property on an As-Is basis and fund up to 75% of the As-Is value. This option is referred to as “stabilized” because the property is considered ready for rental or sale without major repairs.
| Criteria | Guideline |
|---|---|
| LTV (maximum) | Tier 1: 70% |
| Tier 2: 70% | |
| Tier 3: 75% | |
| Tier 4: 75% | |
| Tier 5: 75% | |
| LTFC (maximum) | Tier 1: 80% |
| Tier 2: 80% | |
| Tier 3: 90% | |
| Tier 4: 90% | |
| Tier 5: 90% | |
| Appraisal condition | C1, C2, C3 or C4 |
| Loan Term (maximum) | 12 months |
This program is well-suited for Texas investors seeking to acquire stabilized properties in strong rental markets like Dallas-Fort Worth, Houston, or Austin.
Key Loan Details
| Criteria | Details |
|---|---|
| Loan Amount | $25,000 to $2,000,000* |
| Units per Property | 1 – 4 |
| Eligible Property Types | Non-owner occupied 1-4 unit residential Texas properties including single-family homes, duplexes, triplexes, quadplexes, condominiums, townhomes, and planned unit developments |
| Property Minimum Size | Single Family: ≥700 SQFT |
| Condo and 2-4 Unit: ≥500 SQFT per unit | |
| Max Acreage | 5 acres |
| Loan to Cost (LTC) | Up to 90% purchase, 100% rehab |
| Loan to ARV (LTARV) | Up to 75% |
| Down Payment | Minimum $10,000 for purchase prices under $100,000 |
| Loan Term | 12 months standard; 18-24 months available for specific Texas projects |
| Extensions | Up to 50% of original term (fee applies) |
| Points | 1.5 to 2 points ($2,000 minimum) |
| Prepayment Penalty | None |
| Occupancy | Non-owner occupied — business purpose only |
| Transaction Types | Arms-length purchase, refinance |
| Geographic Region | Texas only |
| Amortization | Interest-only with balloon payment at maturity |
| Interest Accrual Method | Loan Amount < $100K: interest charged on total loan amount ("Full Boat") |
| Loan Amount ≥ $100K: interest charged on funds disbursed ("As Disbursed") |
Extensions
Texas hard money loans are designed to be short-term, typically 12 to 24 months, with most loans paid off well within 12 months. Extending your loan is possible but should be avoided whenever feasible because extensions come with fees, additional interest, and increase your risk of foreclosure if the loan is not repaid after the extension period.
To minimize the need for extensions in Texas, focus on avoiding the following:
Working with general contractors who have limited experience or references in Texas markets
Taking on aggressive rehab scopes beyond your experience or liquidity
Investing in Texas markets with slow zoning and permitting processes
Projects where you do not have immediate access to the property, such as properties with tenants on existing leases or holdovers requiring eviction
Lack of a dual exit strategy to either sell or refinance
Controlling these factors will greatly reduce the risk of delays that might require loan extensions.
Extension Limits
If your Texas loan is not paid off by the end of the original term, you may request an extension up to 50% of the initial loan term. Extensions can be granted in 3- or 6-month increments.
| Initial Loan Term | Maximum Extension Allowed |
|---|---|
| 12 months | 6 months |
| 18 months | 9 months |
| 24 months | 12 months |
Extension Terms and Fees
Extension fees will be added to your payoff statement according to the schedule below:
| Extension Term | Fee |
|---|---|
| 3 months (1st request) | 1% of total loan amount |
| 3 months (2nd request) | 1.5% of total loan amount |
| 6 months (1st request) | 2.5% of total loan amount |
Extension Prerequisites
Before an extension is approved on your Texas hard money loan, you must confirm that your builder’s risk insurance policy remains active throughout the extension period.
Ineligible Property Types in Texas
The following property types are not eligible for funding under our Texas Hard Money Loan Program:
Mixed-use properties with 5 or more units
Commercial properties such as retail, office, or industrial
Manufactured or mobile homes
Properties with active oil or gas leases
Farms, ranches, or orchards actively used in agriculture
Vacation or seasonal rental properties
Unique, exotic, or luxury homes not typical for Texas residential markets
Properties accessed solely by unpaved or dirt roads
Exception Scenarios
Occasionally, Texas borrowers may qualify for exceptions under certain circumstances:
| Scenario | Details |
|---|---|
| Credit score 660 - 679 | Guarantor credit score in this range may be considered on an exception basis |
| Leasehold (ground rent) | Eligible with additional underwriting review |
| Single family property 500–699 SqFt | Eligible with exception documentation |
| 2-4 unit property with unit(s) 400–499 SqFt | Eligible upon review |
| Funding initial advance based on As-Is value exceeding cost basis | Subject to additional due diligence |
| Non-arms length transactions | Require enhanced documentation and review |
| Financed interest payments | May be allowed to preserve borrower liquidity |
Borrower and Guarantor Requirements
| Item | Requirements / Eligibility |
|---|---|
| Borrowing Entities | LLC or Corporation; nonprofits not eligible |
| Eligible Borrowers | US citizens, US permanent residents, qualified foreign nationals |
| Foreign Nationals | Valid passport and US visa (excluding student/travel visas unless on Visa Waiver Program) |
| Credit Requirements | Minimum 680 FICO (exceptions 660–679 on case-by-case basis) |
| Liquidity Requirements | Minimum cash to close plus 25% of rehab budget verified among guarantors |
| Guaranty Structure | Full recourse required; at least 51% of borrowing entity must guarantee purchase loans; 100% guarantee for cash-out refinances |
| Aggregate Guarantor Net Worth | Must equal at least 50% of loan amount |
Credit and Background Items
If three credit scores are available, the middle score is used; if two, the lower score is used.
If no mortgage tradelines or fewer than five total tradelines, six months of interest reserves are required.
Bankruptcy or foreclosure must be older than four years; between 4-7 years may require interest reserves.
Late mortgage payments in the past 12 months require a letter of explanation and may affect eligibility.
Past due balances on mortgages or credit lines must be paid prior to funding.
Liens, judgments, and pending civil lawsuits require resolution or underwriting review.
Borrowers with pending criminal lawsuits or financial crimes are ineligible.
Interest Reserves
Interest reserves cover interest payments collected upfront and held in escrow to be drawn down before borrower payments begin.
| Interest Reserve | Scenario |
|---|---|
| 0 months | Lender discretion |
| 1 month | Guarantor FICO 700+ |
| 3 months | Guarantor FICO 660–699 |
| 6 months | Guarantor FICO 660–699 and/or concerning credit/background items |
Financed Interest Payments
To protect liquidity during rehab, Texas borrowers may finance interest payments, adding unpaid interest to the payoff balance instead of paying monthly.
Example:
Loan amount: $100,000
Interest rate: 12%
Months held: 9
Accrued interest: $9,000 ($100,000 × 12% ÷ 12 × 9)
Payoff statement will include $100,000 principal + $9,000 interest.
Property Sourcing Guidelines for Texas
Key considerations for sourcing Texas investment properties:
New Texas markets require a General Contractor agreement or a detailed Letter of Explanation if a GC is not involved.
Transactions with previous price run-ups, wholesaler deals, or non-arms length sales require additional documentation and review.
Projects involving condos, conversions, or significant renovations must include architect or engineer letters or permits compliant with Texas regulations.
All submissions must include fully executed purchase contracts, settlement statements, payoff letters (if applicable), track records, and formation documents.
Insurance Guidelines for Texas Hard Money Loans
Proper insurance protects both the property and investor. For Texas hard money loans, Builders Risk insurance (also known as Fix and Flip insurance) is mandatory and tailored for properties under construction or vacant.
Coverage and Limits
| Coverage Type | Limit | Required? |
|---|---|---|
| Dwelling | Replacement Cost or Loan Amount (zero coinsurance) | Yes |
| Liability | $1M per occurrence / $2M annual aggregate | Yes |
| Builders Risk | Included | Yes |
| Flood | Greater of $250,000 or loan balance (if in FEMA flood zone) | Conditional |
Coverage Details
| Coverage Item | Requirement |
|---|---|
| AM Best Rating | A- VIII or higher |
| Policy Type | Special Form |
| Deductible | $1,000 to $5,000 |
| Lender's Designation | Mortgagee and Additional Insured |
| Exclusions | No windstorm, hail, or named storm exclusions permitted |
| Cancellation Notice | 30 days |
💡 Pro Tip: Upon taking ownership of the Texas property, promptly install smoke detectors, locks, and security cameras to comply with insurance requirements and avoid denied claims.
Frequently Asked Questions
What states does OfferMarket fund hard money loans in?
OfferMarket proudly funds hard money loans across many states, including Texas. Our service area includes:
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 certain states where an NMLS license is required or we do not directly lend, OfferMarket operates as a rate shopping service referring your loan to a licensed capital provider.
Can I do more than one hard money loan at a time?
Yes, Texas investors and those in other states frequently have multiple hard money loans active at once. While it is common to hold multiple loans, OfferMarket prioritizes risk management and may discuss liquidity or pacing concerns to help you manage your portfolio safely.
Are hard money loans commercial loans?
Yes. Hard money loans are classified as “business purpose” loans because they are issued to your business entity (LLC or Corporation) rather than as personal residential loans.
What is the minimum loan amount?
The minimum loan amount across all states, including Texas, is $25,000.
Which property types are eligible?
We finance non-owner occupied 1-4 unit residential properties in Texas and other eligible states. This includes single-family residences, townhomes, small multifamily buildings (2-4 units), and warrantable condominiums.
What documentation is required?
Purchase Transaction Requirements
| Loan File Item | Description |
|---|---|
| Purchase Contract | Fully executed by buyer and seller |
| Credit Report | Soft tri-merge credit report for each borrowing entity member who will guarantee the loan |
| Background Report | Required for each borrowing entity member |
| Track Record | Required for each borrowing entity member |
| ID Verification | Government-issued ID such as driver’s license, passport, or Green Card |
| Borrowing Entity | Articles of Organization/Incorporation, Operating Agreement/Bylaws, Certificate of Good Standing, W-9 |
| Scope of Work | Detailed rehab budget to establish ARV |
| Appraisal Report | Borrower will receive a link to pay the appraisal invoice; report uploaded to loan file |
| Bank Statements | Two most recent statements per guarantor, can be personal (bank, brokerage, retirement) accounts; need not be in borrowing entity name |
| Letter of Explanation | May be requested by underwriting for items such as large deposits or late payments |
Refinance Transaction Requirements
| Loan File Item | Description |
|---|---|
| Settlement Statement | Fully executed by buyer and settlement agent |
| Credit Report | Soft tri-merge credit report for each borrowing entity member who will guarantee the loan |
| Background Report | Required for each borrowing entity member |
| Track Record | Required for each borrowing entity member |
| ID Verification | Government-issued ID such as driver’s license, passport, or Green Card |
| Borrowing Entity | Articles of Organization/Incorporation, Operating Agreement/Bylaws, Certificate of Good Standing, W-9 |
| Sunk Costs | Documentation of line items and associated costs already incurred |
| Scope of Work | Detailed rehab budget to determine ARV and guide rehab |
| Appraisal Report | Borrower receives a link to pay the appraisal invoice; report uploaded to loan file |
| Bank Statements | Two most recent statements per guarantor, can be personal or business accounts; no need for borrowing entity name |
| Letter of Explanation | Requested as needed for items like large deposits or late payments |
Are there special requirements for loans over $1M?
Loans over $1 million (up to our $2 million maximum) in Texas are subject to enhanced underwriting guidelines:
| Criteria | Explanation |
|---|---|
| Experience | Minimum of 3 similar or greater price point projects strongly preferred |
| Market Liquidity | At least 3 comparable sales within a 2-mile radius on the MLS in the last 6 months |
| Credit Score | Minimum 680 with at least 5 tradelines showing 24 months of history |
| Rural Designation | Not eligible if designated rural by CFPB, USDA, or appraisal report |
| Track Record | Required for all borrowing entity members |
Glossary of Key Terms
| Term | Definition |
|---|---|
| ADU | Accessory Dwelling Unit. A secondary, self-contained housing unit located on the same tax parcel as a primary single-family home, common in Texas residential developments. |
| Arms-length | A transaction between independent parties with no special relationship, ensuring fair market value. |
| Non Arms-length | A transaction involving personal, financial, or business relationships that may affect fairness or terms. |
| Initial Advance | Portion of the total loan wired at closing toward the Texas property's purchase price. |
| Construction Holdback | Portion of the loan reserved for rehab costs, disbursed via draw requests during renovation. |
| Interest Reserves | Funds collected at closing and held in escrow to cover interest payments during the rehab period. |
| LOE | Letter of Explanation. A document clarifying specific borrower details such as credit events or large deposits. |
| LTC | Loan to Cost. Ratio of loan amount to purchase price plus rehab costs. |
| LTFC | Loan to Full Cost. Ratio of total loan to total project cost (purchase price + rehab budget). |
| LTV | Loan to Value. Ratio of loan amount to the property’s current As-Is value. |
| LTARV | Loan to After-Repair Value. Ratio of loan amount to the projected value after rehab completion. |
| As Disbursed Interest | Interest charged only on funds actually advanced (initial advance plus drawn rehab funds). |
| Full Boat Interest | Interest charged on the entire loan amount, regardless of disbursement status. |
| Lopsided Deal | When rehab costs exceed the purchase price or As-Is value, often seen in Texas investment deals with significant renovations. |
| GC Agreement | Contract with a general contractor outlining scope and responsibilities for Texas rehab projects. |
| DSCR | Debt Service Coverage Ratio. Measures property income relative to debt payments (Rent ÷ PITIA). |
Instant Hard Money Loan Quote for Texas Investors
OfferMarket Capital LLC is a leading private lender specializing in hard money and DSCR loans for Texas 1-4 unit residential real estate investors. Our mission is to help you build wealth through Texas real estate by providing fast, flexible financing tailored to the unique Texas market.
Thousands of Texas real estate investors trust OfferMarket each month to gain access to:
💰 Private lending ☂️ Insurance rate shopping 🏚️ Off market properties 💡 Market insights
