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Private Money Lender

A hard money loan is a short-term real estate loan made mainly on the property, not on your paycheck or credit history. "Private" describes where the money comes from: private capital instead of a bank. "Hard money" describes how the loan is made: against the real estate. At Northwest Private Lending, every borrower sees the same published pricing.

What is the difference between private money and hard money?

Private money describes the source of the capital: cash from private individuals rather than a bank. Hard money describes the kind of loan: an asset-based loan, where the lender looks first at the property and the equity in it. Most of the loans we make are both, which is why people use the two terms interchangeably.

What does a hard money lender look at?

We look first at the property, the equity in it, and your plan to repay. One question we ask is this: if the market dropped 30%, could the property still be sold and protect the money lent? That is how we think about risk, not a fixed rule or a guarantee. Because the loan rests on the property, situations that can stop a bank loan, such as a new job, a gap in work, a divorce, or a past bankruptcy, do not automatically rule you out. We still review the whole picture, and every loan follows the state and federal lending laws that apply to it. For how points, LTV, interest-only, and maturity work, see common hard money loan terms.

How is that different from a bank or conventional loan?

Many bank and conventional loans are written to set guidelines so they can be sold or insured, so the borrower and the property have to fit a box. Our loans are not packaged to be resold, so we can make an individual decision on a property or a situation that a bank's guidelines would not fit. That flexibility still works within the lending laws that apply, including consumer, occupancy, and licensing rules. Our conventional versus hard money FAQ walks through the comparison.

Why does a hard money loan cost more than a bank loan?

Our loans are funded with private capital that stays at risk for the life of the loan, with no government insurance on repayment. That is why a hard money loan costs more than a 30-year mortgage. We publish one price list for every borrower. Loan origination is 3 points (3% of the loan amount) with a $2,500 minimum. Interest is 1% per month (12% a year), interest-only. The loan document fee is $650 on non-owner-occupied loans, or $850 on owner-occupied loans in Oregon and Idaho. There is no underwriting fee, no required appraisal, $0 in required reserves, never a prepayment penalty, and a $0 extension fee on performing loans. On a $100,000 loan, that is a $3,000 origination fee and about $1,000 a month in interest. On a $500,000 loan, that is a $15,000 origination fee and about $5,000 a month. The full schedule is on What Are NWPL Rates and Terms?.

When does a hard money loan make sense?

A hard money loan is the right tool only when you need it. Two things should be true. First, there is no better bank option. Second, there is meaningful equity in the property or a meaningful down payment. If a bank can make your loan, take the cheaper bank loan. Hard money fits when you need a fast close on an investment property, when a bank will not lend on the house yet, when you are bridging from one property to the next, when you need a short-term cash-out refinance, or when your circumstances do not fit a bank's guidelines right now. See when you should use hard money and pros and cons of hard money.

Can you use hard money on a home you live in?

Owner-occupied loans are available in Oregon and Idaho; in Washington, we make business-purpose loans on non-owner-occupied property only. Owner-occupied loans use the same 3 points and 1% per month, with the $850 document fee, generally a 5-year maturity, and typically close in 7 to 10 business days. Details are on closing costs and owner-occupied loans.

What kinds of property and programs do you fund?

Fix and flip, rehab and refinance, bridge, cash-out, commercial and industrial, 1031 and reverse 1031, acquisition, ITIN, and in-process construction loans, generally from $50,000 to $2,000,000. We do not offer ground-up construction loans. Browse the loans we offer or start with fix and flip and bridge loans.

How do you get a hard money loan with us?

Call or apply, we review the property and your plan, and approval is often same-day. Investor loans typically close in 3 to 5 business days once title and insurance are ready (how fast we close). Call 503-941-5473, Monday through Friday, 9am to 5pm PT. You can also pre-qualify online, apply for a loan, or send us a message.

Who is Northwest Private Lending?

Northwest Private Lending is a family private office that began in 1987 as Clunas Funding Group and rebranded to Northwest Private Lending in 2016. Our offices are in Portland, Boise/Meridian, and Seattle/Bellevue.

A private lender is a person or business who is lending you their own money. This contrasts with institutional lenders like banks, which borrow from depositors to fund loans.

Private lenders establish their own lending criteria and can approve loans that traditional institutions won't consider. They commonly overlook factors such as credit scores, back taxes, and bankruptcies. Most private money loans are secured by real estate collateral.

Key distinctions from conventional lending include faster approval processes, more flexible qualification standards, ability to finance non-traditional investment properties, and lender discretion in setting terms.

Borrowers should work with trustworthy lenders and seek recommendations from those with prior experience.

Northwest Private Lending is a family office with a legacy in private lending that dates to 1987 — nearly 40 years. Over the course of our business, we have closed 3,000-plus loans and $690 million-plus in financing. Clunas Funding Group was rebranded as Northwest Private Lending in 2016 and lends $50,000 to $2,000,000 per loan on investment real estate across Oregon, Washington, and Idaho, with a transparent approach and a commitment to fair dealing with borrowers.

A hard money loan should only be considered when accessing capital now provides greater value or profit than the interest costs. All loans should be comfortably affordable monthly and used to purchase assets that generate income or provide long-term value.

Here are seven key assessment questions:

1. Timeline Need: If closure within 10 days is required, hard money works since private lenders focus on property equity without lengthy appraisals or inspections. Otherwise, banks offer competitive rates with 45-60 day timelines.

2. Primary Residence: Conventional loans suit primary residences in most cases. Hard money applies to investment properties like rentals or flips.

3. Loan Duration: Hard money is not ideal for long-term needs (rates range 9-15%). For short-term requirements, hard money compensates for higher rates through capital accessibility. At NWPL, business-purpose (non-owner-occupied) loans are generally written for 2 years, and owner-occupied loans (Oregon and Idaho only) generally for 5 years. When a loan is in good standing at maturity and you want to keep it longer, we extend it for free.

4. Exit Strategy: Properties planned for sale or refinance within 24 months align with hard money terms. Longer holds warrant conventional amortized loans.

5. Cash Purchase Goals: Hard money enables cash-like offers for foreclosures and distressed properties purchased below market value.

6. Retirement Account Repayment: If repaying borrowed retirement funds, a 12% hard money loan becomes attractive versus potential 60% tax penalties.

7. Real Estate Equity: Hard money requires existing real estate collateral. Those real estate-rich but cash-poor benefit from quick equity access.

Northwest Private Lending is a family office private lender in Oregon, Washington and Idaho, and every borrower gets the same pricing. Here is the full list:

• Loan origination fee: 3 points, $2,500 minimum
• Loan document fee: $650 on non-owner-occupied loans; $850 on owner-occupied loans (Oregon and Idaho only)
• Interest: 1% per month (12% a year), interest-only payments
• Underwriting fee: none. Appraisal: not required. Required reserves: $0
• Prepayment penalty: never. Extension fee: $0 on performing loans

What "three points" means

A point is 1% of the loan amount. Three points is 3% of the amount you borrow, charged once at closing as the loan origination fee. It is figured on the loan amount, not on the purchase price or the property value.

• $100,000 loan: $3,000 origination fee
• $250,000 loan: $7,500 origination fee
• $500,000 loan: $15,000 origination fee
• $2,000,000 loan: $60,000 origination fee

Add the document fee and you have everything NWPL charges to make the loan. A $100,000 non-owner-occupied loan carries $3,650 in NWPL fees at closing and $1,000 a month in interest. A $500,000 loan carries $15,650 at closing and $5,000 a month. Title insurance and escrow closing costs are separate third-party charges from the title company and escrow — they are not included in the 3% origination fee — and recording and other third-party costs are disclosed before you sign.

Why there is a $2,500 minimum

A $60,000 loan takes about the same work as a $600,000 one: we review the property, talk through your plan, work with title and escrow, and prepare and fund the loan. At 3%, any loan under about $83,333 would earn less than $2,500, so the minimum applies to those smaller loans. On a $50,000 loan, for example, the origination fee is $2,500, which works out to 5% of the loan. We would rather tell you that up front than surprise you at closing.

Why private money costs more than a bank loan, and where the fee goes

Private money loans are priced differently from a 30-year bank mortgage. A bank spreads its costs over decades of payments. Our bridge loans, fix and flip loans and other real estate investment loans are usually paid off in months, or within about two years, so the cost of making the loan is collected once, at closing. The origination fee is paid to Northwest Private Lending and covers everything related to originating your loan in-house: the paperwork, evaluating the property ourselves instead of ordering an appraisal, underwriting the deal, and keeping the people who decide on your loan available for same-day approvals and 3–5 business day closings. Title insurance and escrow closing costs are separate third-party charges from the title company and escrow, and they are not included in the 3%. Monthly interest is the return on the family office capital that funds your loan. We do not add underwriting, processing or extension fees on top.

Owner-occupied loans in Oregon and Idaho

We also make owner occupied hard money loans in Oregon and Idaho, including loans on primary residences. They use the same 3 points and 1% per month, with an $850 document fee, generally a 5-year maturity, and typically close in 7–10 business days. In Washington we make business-purpose loans on non-owner-occupied property only.

Because we practice asset-based lending, approval turns on the property's equity and your plan, not your credit score. Call 503-941-5473 and we will run the numbers on your deal with you.

A private money loan involves borrowing from an individual or business lending their own saved capital or borrowed funds. Unlike banks that lend depositors' money, private lenders are just people like you who set their own loan terms and requirements.

Private lenders commonly overlook credit scores, back taxes, and bankruptcies that would disqualify conventional borrowers. Loans are typically secured by valuable assets, most commonly real estate through a lien arrangement.

Benefits include flexible qualification standards, faster approval processes, and customized loan terms.

Borrowers should work with trustworthy lenders and check references or reviews before borrowing.

Northwest Private Lending brings nearly 40 years of family-office lending that has financed nearly seven hundred million dollars since 1987. Clunas Funding Group was rebranded as Northwest Private Lending in 2016 and lends $50,000 to $2,000,000 per loan on investment real estate in Oregon, Washington, and Idaho, with transparent practices and fair treatment of borrowers.

Underwriting for hard money loans evaluates lending risks based primarily on property collateral value rather than borrower creditworthiness. The process involves five key components:

1. Property Evaluation: Assessment of the property's value, condition, and marketability to determine suitability as collateral through appraisals and inspections.

2. Loan-to-Value Ratio (LTV): Hard money lenders typically advance a percentage of property value, with lower ratios reducing lender risk through larger equity cushions.

3. Borrower's Equity: Though asset-based, lenders consider the borrower's equity stake as an indicator of commitment and risk reduction.

4. Exit Strategy: Lenders assess how borrowers plan repayment through property sales, traditional refinancing, or alternative funds.

5. Terms and Conditions: Final loan structure including interest rates, fees, and repayment schedules are determined based on assessed risk factors.

Underwriting for hard money loans is a more streamlined process compared to traditional loans, with a focus on the value and marketability of the collateral property.

Northwest Private Lending secures every private capital loan with real estate. That collateral approach is the foundation of nearly seven hundred million dollars in loans funded across more than three thousand loans to borrowers in Oregon, Washington, and Idaho.

Real estate serves multiple purposes in hard money lending. First, it leverages the intrinsic value of real estate assets to empower borrowers pursuing investment goals. Second, the diversity of acceptable property types — residential homes, commercial buildings, and vacant land — allows the lender to serve a broad spectrum of borrowers and financing needs, from property renovations to development ventures.

By requiring real estate collateral, hard money lenders mitigate risk while enabling borrowers to access capital quickly for various real estate investment strategies.

Hard money loans are asset-based, with underwriting decisions primarily focused on the equity or value of the property in which the loan is being made. These loans typically come from private lenders using their own capital and are commonly used for investment properties.

Hard money loan advantages include quick closing timelines (at NWPL, typically 3–5 business days for non-owner-occupied loans and 7–10 for owner-occupied loans in Oregon and Idaho), minimal documentation requirements, and flexible qualification criteria set by individual lenders rather than government standards. Disadvantages include higher costs due to private lenders determining their own interest rates, and lenders establishing their own repayment terms, requiring borrowers to carefully review agreements.

Conventional or conforming loans adhere to Fannie Mae and Freddie Mac guidelines. These standardized mortgages can be sold on secondary markets, enabling lenders to offer more competitive rates. Advantages include the lowest interest rates available for primary residence purchases and regulatory protections against predatory lending practices. Disadvantages include strict borrower requirements including strong credit scores, documented income history (1-2 years), and low debt levels, extended processing timelines (approximately 60 days), and required property appraisals.