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Hard money

Hard money policies are those which are against Fiat money and therefore usually in support of the Gold standard, or other standard based on other precious substances. Hard money also refers to a type of commercial real estate loan product that requires real estate backing. Hard money is most commonly used as a type of bridge loan for temporary financing.

A Hard Money Loan is a loan in which real estate serves as the collateral asset. As with other collateralized loans, the size, rate, and length of a hard money loan is determined by the borrower’s equity in the asset, the volatility of the asset and marketplace, and the financial standing of the borrower. Hard money loans are funded for business and personal use. The real estate asset may be business or personal property, and the proceeds of hard money loans are not restricted to business use.

Each hard money lender determines the parameters and/or restrictions they will impose on hard money loans.

When Hard Money Makes Sense Hard money is more expensive than bank mortgage loans. However, hard money makes sense in many business and personal scenarios. The most common uses of hard money is for business purposes, when time is of the essence and when the borrower or the asset do not fall within the often stringent loan criteria (also known as the ‘sweet spot’) for banks.

Hard money is often used as a bridge loan for real estate purchases – a short term financing solution for any number of reasons, either to avoid a probem or take advantage of an opportunity.

• On the flip side, hard money may be used by the current owner of a property to save it from foreclosure.
• Hard money is used to finance business acquisitions/mergers.
• Business turnaround strategies may make use of hard money, as the borrower often does not meet bank financing criteria.

Hard money is an expedient option for the restructuring of debt or to avoid corporate or personal bankruptcy. When instant cash flow is required, and bank loans would take too long or the borrower does not meet bank lending criteria, hard money may be used to meet environmental protection agency mandates, taxes, fines and/or levies.

In any circumstance in which the borrower or the real estate asset does not meet bank lending criteria, whether it be current financial status or financial history, type of property, legal residential or citizenship status of the borrower, or other, hard money can often provide a swift temporary or permanent solution.

Hard Money Loan Terms and Conditions Hard money loan terms and conditions differ from bank or mortgage loans. Due to the increased risk of working with more relaxed or flexible criteria than banks, hard money loans have shorter terms and higher rates. However, in order to make hard money loans a viable solution for borrowers, hard money lenders may structure the financing of the loan in creative ways.

Some lenders have structured hard money loans such that a portion of the interest owed was deferred and included in balloon payment at a future date. This yielded affordable monthly payments for an immediate solution and provided for payment of the additional interest in the future, giving borrowers time to arrange for long term financing and/or be reach a financial maturity in the funded projects so that the balloon payment could be made.

Here are some terms you are likely to find in hard money loans:

• Loan terms from one to three years
• Higher interest rates than found in bank or traditional mortgage financing
• Higher points, which may be required to be paid in advance
• The possibility of participation in the success of the venture, in the form of a back-end fee, deferred interest, or balloon payment

Hard money lender

Hard money lenders are commercial real estate lending companies offering a specialized type of real-estate backed loan. Hard money lenders provide short-term loans (also called a bridge loan) that provide funding based on the value of real estate that has been collateralized for the loan. Hard money lenders typically have much higher interest rates than banks (between 11 and 16%) because they fund deals that do not conform to bank standards.

Hard money lenders may serve a regional market, or may offer loans nationwide. However, several states’ usury laws, including Tennessee and New Jersey prevent hard money lenders from operating with their usual practices. Hard money lenders are often represented by brokers who may take a percentage of the loan (called points) in exchange for preparing and submitting the loan documentation (as well as finding a direct lender).

Hard money lenders will offer a range of requirements on the loan-to-value percentage, type of real estate & minimum loan size for a hard money loan. Several online directories offer links to multiple hard money lenders for brokers or borrowers seeking a lender.

Homeowners association

A homeowners association is an organization which functions as the quasi-government of a subdivision, generally a residential subdivision. Homeowners association are common in the United States exercising control over 19% of American homes, 20 million homes.

Homeowners associations collect fees from homeowners, maintain the facilities of the community, and enforce the agreements which govern the association. This may include detailed rules regarding construction and maintenance of individual homes.

Although homeowners associations perform some of the functions of a local government the constituency which elects them consists only of homeowners, who need not be residents, and excludes voting by residents of the community who are not homeowners, renters.

House

For other meanings of the word House see House (disambiguation).

A house in its most general sense is a human-built dwelling with enclosing walls and a roof. It provides shelter against precipitation, wind, heat, cold and intruding humans and animals. When occupied as a routine dwelling for humans, a house is called a home (though animals may often live in the house as well, both domestic pets and “unauthorised” animals such as mice living in the walls). People may be away from home most of the day for work and recreation, but typically are home at least for sleeping.

A house generally has at least one entrance, usually in the form of a door or a portal, and may have any number of windows or none at all.

Housing association

Housing associations in the United Kingdom are independent not-for-profit bodies that provide low cost housing.

They first appeared in the second half of the 19th century as part of the growth in philanthropic and voluntary organisations brought about by the growth of the middle classes in the wake of the Industrial Revolution.

Housing associations increased in importance over the last decades of the 20th century due to reforms to council housing brought in by the Thatcher government, when rules were introduced that prevented councils subsidising their housing from local taxes. This, combined with cost-cutting initiatives in local government led to many councils transferring their housing stock to housing associations. Housing associations are now the providers of most new public housing in the UK.

The National Housing Federation (NHF), formerly the National Federation of Housing Associations is the industry body that represents housing associations in the United Kingdom. At the start of 2003 they had around 1400 non-profit housing organisations in their membership, owning or managing approximately 1.8 million homes.

Housing associations in England are funded and regulated by the Housing Corporation, a quango that reports to the Office of the Deputy Prime Minister.

Legally housing associations are Industrial and Provident societies.

Housing cooperative

A housing cooperative is a legal form of real estate ownership where residents own shares in an entire group of homes, usually one or more apartment buildings.

This is distinct from condominiums where people own individual units. In not-for-profit housing co-ops each resident or resident household has membership in the co-operative association. Members have occupancy rights to a specific suite within the housing co-operative as outlined in their “occupancy agreement”.

A cooperative housing project can resemble a traditional apartment building, or it can be the basis of an intentional community.

“Building co-operatives” are formed by members who co-operate to build their homes but own their houses on completion. Building co-ops were extremely popular across Canada from the 1930s to the 1960s.

Housing estate

A Housing Estate is a medium-to-low density residential area, usually part of a suburb of a town or city in a developed country. They are the most common form of residential area in the UK, and are similarly popular in Europe. They are less prominent in countries with lower population densities, such as the USA and Australia. In contrast to high density housing, such as tower blocks, town housing or the older-style rows of terraced houses associated with the industrial revolution, housing estates usually feature detached or semi-detached houses with small plots of land around them forming gardens. Very often, an estate will be built by a single contractor, with only a few styles of house design, so they tend to be very uniform in appearance. This phenomenon is less prevalent in Australia and the US, where estates often feature individual houses each built to a unique design selected by the initial occupier.

Housing estates are the usual form of residential design used in New towns, where estates are designed as an autonomous suburb, centred around a small commercial centre. Such estates are usually designed to minimise through-traffic flows, and to provide recreational space in the form of parks and greens.

In the UK, housing estates have become prevalent since World War Two, as a more affluent population demanded larger and more spaced apart houses. In addition, the problems incurred by the early attempts at high density tower-block housing turned people away from this style of living. The resulting demand for land has seen many towns and cities increase enormously in size for only moderate increases in population. This has been largely at the expence of rural and green belt land. There is now much evidence coming to light of a severe and detrimental impact on the environment as a result, partly from the change of land use caused by the estates themselves, and partly because most estates encourage rather than discourage the use of the car for transport. Recently, there has been some effort to address this problem by banning the development of out-of-town commercial developments, and encouraging the reuse of brown field sites for residential building. Nevertheless the demand for housing continues to rise, and in the UK at least has precipitated a significant housing crisis.

Housing tenure

Housing tenure refers to the financial arrangements under which someone has the right to live in a house. The most frequent forms are tenancy, in which rent is paid to a landlord, and owner occupancy. Mixed forms of tenure are also possible.

The basic forms of tenure can be subdivided, for example an owner-occupier may own a house outright, or it may be mortgaged. In the case of tenancy, the landlord may be a private individual, a non-profit organisation such as a housing association, or a government body, as in public housing.

Surveys used in social science research frequently include questions about housing tenure, because it is a useful proxy for income or wealth, and people are less reluctant to give information about it.