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Independent Lending offers owner-occupied loans for California borrowers . Only a handful of private lenders offer hard money primary residence loans. Let our experience and service help with your goals.

  • Business Purpose Loans

  • Low FICO - OK!

  • Recent BK - OK!

  • No Income Calculations

  • Less Requirements than the Big Banks


With over 40 years of combined mortgage experience, Independent Lending is your go to lender for owner-occupied hard money lending. We look forward to providing excellent service and becoming a trusted partner for your mortgage lending.

Contact us
 today for more information on how we can approve you for an owner-occupied private money loan.


What Sets Us apart


130 Five Star
  • 130 Zillow 5 Star Reviews
  • 5 Star Google Reviews
  • A+ Rating with BBB​


Loans Funded
$ 500 Million
  • 40 Years Mortgage Lending
  • Poor - Excellent Credit
  • Several Programs


Average Days to Fund
15 days
  • No Upfront Fees Ever!
  • Same Day Approval
  • Direct Lender

What is an Owner-Occupied Hard Money Loan

Owner-Occupied Hard Money Loans are a unique lending program. Whether buying a rental property in California or pulling cash out to expand your business, owner-occupied hard money loans can help you reach your goals.

Understanding how an owner-occupied hard money loan works and who it works best for is important before choosing your financing option.

An owner-occupied hard money loan is a short-term loan on a primary residence that helps borrowers who otherwise wouldn’t qualify for conventional financing. These types of loans are called 
Business Purpose Loans.

These primary residence mortgage loans typically have a term of 6 to 60 months and are used by investors who buy or rehab rental properties, as well as small business owners looking to start or inject capital into their business. Private lenders use the primary residence as collateral to guarantee the loan. These loans can be recorded as hard money first mortgage, 
hard money second mortgage or hard money third mortgage liens.

The Investors don’t pay much attention to the borrower’s credit or income because the location, equity and good condition of the property will protect their interests while making a equitable monthly return on their investment.-

How an Owner-Occupied Hard Money Loan Differs from a Conventional Loan

There are many differences between owner-occupied hard money loans and conventional loans.

More Flexible Underwriting Requirements

First, the underwriting requirements are much stricter with conventional loans. This is because investors buy loans from lenders, and the lenders must meet the investor’s strict requirements. Most conventional loans require great credit, low debt-to-income ratios, and a solid employment history.

Hard money lenders don’t have the same requirements. Typically, if they look at the credit report, its done so for seeing the big picture of the borrowers credit history, however they don’t hold a low credit score against them. They also don’t measure a borrower’s income compared to their current debts.

Hard money lenders focus on the properties location, equity, and condition, not entirely on the borrower’s personal qualifications.

Larger Down Payments

The low-down payment requirements are one benefit of conventional loans, especially for investment properties. Most investors can secure a conventional loan by putting as little as 15% down on the home.

California hard money purchase loans require a much higher down payment because they focus on the equity and not on borrower qualifications. It can take longer to save money for the larger down payment, but you don’t have to worry about having great credit or a low debt-to-income ratio.  The same goes with refinancing for pulling cash out. There is a requirement for a lot of equity to make this type of loan work.

Faster Closings

Hard money loans can take as little as one week to close, whereas conventional loans take 30 – 45 days to close. This is a big difference, especially if you’re performing a bridge loan for a new home purchase. Home sales can go fast and require a down payment immediately. Unfortunately, many buyers don’t have the time to wait for how long conventional loans take.

Need a California Owner-Occupied Hard Money Loan?

Dusk view of a modern home - Achieve your real estate dreams with our trusted Sacramento hard money lender services!

Residential Owner-Occupied businesS purpose Loan

Evening cityscape of modern homes - Symbolizing Sacramento commercial property success with hard money loans!

Commercial Business Purpose Loans

Benefits of an Owner-Occupied Hard Money Loan

Borrowers enjoy many benefits with a hard money loan on their primary residence that they can’t get with conventional financing.

Bad Credit is Acceptable

First, and probably most important, bad credit is okay! You don’t need a 680+ credit score or anything close to it. Yes, hard money lenders may pull your credit, but they won’t use your credit score against you. Most pull your credit just to see your credit history to ensure you’re an overall good risk. They won’t turn you down if you have bad credit scores, though.

Unlike conventional loans that require 680+ credit scores and only offer the most competitive rates to those with perfect credit, hard money loans are a good alternative for investors and business owners with 
poor to average credit.

Income isn’t a Factor

Conventional lenders look closely at your income and compare it to your monthly debts. So, if you have a lot of credit card debt, personal loans, or other consumer debt, it will count against you when you apply for a conventional loan.

Hard money lenders focus on the 
property equity, not on how much money you make. They lend because they know it’s a secure and stable return on their investment compared to the erratic stock market or low yield money market accounts. The equity protects them in case of default and foreclosure if payments are not being made, just like any other mortgage.

Fast Closings

Sometimes you just need to close on a mortgage loan fast, and it’s possible with hard money loans. You don’t have to worry about taking 30 – 45 days to close the loan, which can feel like forever, and things can fall apart in that time.

Sometimes a fast closing is necessary to keep the deal too. This is true if you buy a 
home at an auction or in other special circumstances. For example, knowing you can close fast can give you the upper hand if you’re in a bidding war.

Interest Only for Low Payments

Interest-only payments make your monthly payments more affordable when buying a house or cashing out with a refinance.  The larger the loan amount, the greater the difference between an interest-only payment and a fully amortized 30-year loan. As a new business owner or homeowner, interest-only payments can be a big help.

Owner-Occupied Hard Money Loan Highlights

(State Specific)

Disadvantages of an Owner-Occupied Hard Money Loan

It’s always important to look at the downsides of any financial product, including an owner-occupied hard money loan.

It’s a Short-Term Loan

Conventional financing is for 30 years on average, but hard money loans are usually for 6 to 60 months. Some private lenders extend the terms once the balloon is due, but there is no guarantee and they may charge you a small fee for this.

You Might Pay a Prepayment Penalty

Some hard money loans have a prepayment penalty. If you pay the loan off early, you may pay extra. Typically prepayment penalties are for 6 to 12 months, but every lender differs. Always read the fine print to determine what it would cost if you were to pay the loan off early.

You Need a Lot of Equity

Hard money lenders use the property equity as the primary deciding factor for approval. Because of this, they won’t allow high loan-to-value ratios. Instead, they require you to put down a large amount when purchasing or have a lot of equity when refinancing.

Most private money lenders require 30% – 40% equity in the home. This can be a hard goal to reach if your purchasing an investment property and don’t already have the cash available.

Higher Rates and Fees

Hard money business purpose loans are considered high risk for the lender. They don’t review income documentation such as W-2’s or tax returns for debt to income qualifications. Instead, they take a calculated risk based on a property’s location, condition, and resale value. Because of the laxed underwriting, private money lenders will charge higher rates and fees on the loan.

They charge higher rates and fees to offset the risk of default. While they know they can sell the property if the borrower doesn’t make their payments, property values rise and fall often, so charging higher rates and fees ensures the lender’s financial security.

Tougher to Create an Exit Strategy

With fix-and-flip properties, the exit strategy is simple. You renovate the property and sell it within six to twelve months.

That’s not the case with a primary residence. Most people keep their primary residence for many years, but hard money loans typically last up to 5 years. They eventually have a balloon payment due, which means you could owe hundreds of thousands of dollars at once.

Popular exit strategies before balloon comes due:

  • Use a different loan for repayment such as a loan from the Small Business Administration

  • Refinance into a subprime loan

  • Refinance into a conventional loan

  • Use assets from other investments to pay it off

  • Refinance with another hard money loan

  • Sell the property

Without an exit strategy you could find yourself in a financial bind. You should always discuss the exit strategy with your loan officer.

Not Every Hard Money Lender Offers Owner-Occupied Loans

Be ready to search around if you’re thinking about working with a hard money lender on owner-occupied hard money loans.

Not all lenders offer hard money loans on owner-occupied properties because of the risk they create. It’s different when lending to an investor fixing and then quickly selling the property in less than one year. The lender knows they’ll get their money back quickly. With an owner-occupied property, though, it could take 3 – 5 years to see their full investment again.

Key Takeaways

California owner-occupied hard money loans are a great way to finance the property that you live in if you don’t qualify for conventional financing. Unless you have great credit and no recent credit events, it can be hard to get conventional financing, but hard money loans are an option.

Before choosing your hard money lender, do your research. Working with a trusted and knowledgeable mortgage professional who can show you the different options and how they affect your finances is important.

When you work 
with us, no case is too unique. We work on a case-by-case basis, ensuring each applicant gets our full attention when determining if we can finance their owner-occupied property.

How We Can Help

Real World Scenario

Independent Lending funded a $110,000 Owner-Occupied Hard Money Loan for business purpose in Stockton, California. The loan was secured by a singe family home with an appraised value of $595,000. The borrower was self-employed and requested the funds to expand her business. We were able to fund her business purpose loan in 2 weeks. Income and credit were not major factors in the approval.

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Frequently asked questions about California owner-occupied Hard Money Loans

Each loan is case by case, however we work with a lot of borrowers that have: poor credit, recent BK, Short Sale or Loan Modification.  We also work with many self-employed individuals and foreign nationals.  Finally, bridge loans for primary residence and W-2 employees that have less than 2 years of employment history are also candidates.

Yes, in California and Arizona we can offer a primary residence 2nd or 3rd mortgage if it fits within our guidelines.

Yes, the new loan would need to be Business Purpose. One example of Business Purpose is obtaining a cash out refinance on your primary residence for cash injection into your currently active small business.

Need a California Owner-Occupied Hard Money Loan?


Contact Independent Lending

Call Toll Free: 1.800.315.0043 / Local: 949.830.3151 or click the Contact Us button to fill out our secure web form for a call back. At Independent Lending, we give every loan request the respect it deserves.

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