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Hard Money Loan Contract for the United States

Hard Money Loan Contract Template for United States

A Hard Money Loan Contract is a legally binding agreement used in the United States between a private lender and borrower, typically secured by real estate. This document outlines the terms of a short-term, high-interest loan based primarily on the value of the collateral rather than the borrower's creditworthiness. It includes specific provisions for interest rates, repayment terms, default conditions, and security arrangements, while complying with federal and state lending regulations.

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Hard Money Loan Contract

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What is a Hard Money Loan Contract?

The Hard Money Loan Contract serves as a crucial document in private lending transactions within the United States, particularly in real estate investments and development projects. This agreement is specifically designed for situations requiring quick financing where traditional lending options may not be suitable or available. The contract addresses key elements including collateral requirements, interest rates (typically higher than conventional loans), repayment schedules, and default provisions. It must comply with state-specific usury laws and federal lending regulations while protecting both lender and borrower interests. Hard Money Loan Contracts are particularly valuable for time-sensitive deals, property rehabilitation projects, or situations where traditional financing criteria cannot be met.

What sections should be included in a Hard Money Loan Contract?

1. Parties: Identification of lender and borrower with full legal names and addresses

2. Background: Context of the loan and purpose

3. Definitions: Key terms used throughout the agreement

4. Loan Amount and Terms: Principal amount, interest rate, term length, and payment schedule

5. Security/Collateral: Description of property or assets securing the loan

6. Default Provisions: Circumstances constituting default and remedies

7. Repayment Terms: Payment schedule, prepayment provisions, and late payment penalties

What sections are optional to include in a Hard Money Loan Contract?

1. Insurance Requirements: Property insurance requirements, applicable when loan is secured by real property

2. Assignment Provisions: Terms for transferring loan rights, applicable when loan may be sold or transferred

3. Construction Draw Schedule: Schedule for releasing funds, applicable for construction-related hard money loans

What schedules should be included in a Hard Money Loan Contract?

1. Property Description Schedule: Detailed legal description of secured property

2. Payment Schedule: Detailed amortization schedule or payment terms

3. Required Disclosures: State and federal required disclosure forms

4. Due Diligence Documents: Property appraisals, inspections, and title reports

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Clauses



























Industries

Truth in Lending Act (TILA): Federal law requiring disclosure of credit terms and standardizing the manner in which costs associated with borrowing are calculated and disclosed.

Real Estate Settlement Procedures Act (RESPA): Federal law requiring lenders to provide borrowers with disclosures regarding the real estate settlement process and prohibiting kickbacks.

Equal Credit Opportunity Act (ECOA): Federal law prohibiting discrimination in lending based on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.

Fair Housing Act: Federal law prohibiting discrimination in real estate transactions, including lending, based on protected characteristics.

Dodd-Frank Act: Comprehensive financial reform legislation that includes provisions affecting mortgage lending and consumer protection in financial transactions.

CFPB Regulations: Rules and guidelines set by the Consumer Financial Protection Bureau governing consumer lending practices and disclosures.

State Usury Laws: State-specific regulations that set maximum interest rates and terms for loans to prevent predatory lending practices.

State Licensing Requirements: State-specific regulations requiring lenders to obtain proper licensing and registration to conduct lending business.

State Disclosure Requirements: State-specific rules mandating certain disclosures to borrowers during the loan process.

State Foreclosure Laws: State-specific regulations governing the process and requirements for foreclosure proceedings.

Securities Act of 1933: Federal law governing the registration and regulation of securities offerings, which may apply if the loan is securitized.

Securities Exchange Act of 1934: Federal law regulating secondary market trading and establishing the SEC, relevant if loans are packaged and sold as securities.

Blue Sky Laws: State-specific securities laws regulating the offering and sale of securities to protect investors from fraudulent activities.

Uniform Commercial Code (UCC): Standardized set of laws governing commercial transactions, including secured lending and collection practices.

Recording Requirements: State and local requirements for recording mortgage documents and other loan-related instruments in public records.

Anti-Predatory Lending Laws: Federal and state laws designed to prevent abusive lending practices and protect borrowers from unfair loan terms.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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