Investor loan glossary: every term from offer to payoff.

Short-term, property-backed money from a private lender rather than a bank, sized mainly on the deal instead of your income.

Hard money is a style of lending more than a single product: fast, secured by the property, interest-only and due within months. Fix and flip, bridge and construction loans are usually hard money. Terms published in October 2026 ran 6 to 24 months, and closings took about one to three weeks; Kiavi advertised 7 days and RCN 10 business days.

Speed is what you pay for. Short-term investor loans reported under HMDA for 2025 had a median rate of 10%: 10.45% from non-bank lenders, with the middle half between 9.75% and 11%, against 7.5% from banks. Points come on top.

A short-term loan that buys a property and pays for its renovation, repaid when you sell or refinance.

The purchase money funds at closing; the rehab money waits in a holdback and comes out in draws. Lender pages in October 2026 showed financing of 85% to 100% of the price plus the full rehab budget, under an overall cap of 70% to 80% of ARV, for 6 to 24 months. Minimum scores ran 600 to 660, and loan sizes from $50,000 to $5 million.

Payments are interest-only, and interest on the rehab portion accrues only once it’s drawn.

Short-term financing that carries a property from one event to the next: a fast purchase to a sale, or to a long-term refinance.

For 1–4 unit property that needs little or no work, October 2026 terms ran 70% to 85% LTV (Roc also offered 85% LTC), 12 to 24 months, credit minimums of 660 to 700 and closings in 7 to 14 business days. Lima One and Kiavi published no prepayment penalty, so paying off early costs nothing extra.

What the lender studies is how you’ll pay it back. Roc’s stabilized bridge, for example, looks for an exit through a sale or a rental refinance at a DSCR of 1.10.

A loan that funds a new build from the lot to completion, releasing construction money in inspected stages.

Terms published in October 2026: 82.5% to 90% of total cost, 100% of hard construction costs, a land advance of 60% to 75% (Roc drops to 60% on an unpermitted lot) and a cap of 65% to 75% of completed value. Terms ran 12 to 24 months, Kiavi listed 3- and 6-month extensions, and points ran 1% to 2%.

Expect to show permits or a clear path to them, plans, a builder’s line-item budget and, at most lenders, a completed build in the last few years.

The lender’s written outline of a proposed loan: amount, rate, points, term, leverage, fees and open conditions.

Read it as the deal’s scorecard. Check the loan against your cost and ARV; the rate and points together; whether interest accrues on the whole commitment or just the money drawn so far; the term and any extension options; the prepayment penalty; and recourse and guarantees.

A term sheet isn’t a promise to lend. The appraisal, title, insurance and final underwriting all come after it, so read its conditions list as your to-do list.

An upfront lender fee priced in percent of the loan amount: 1 point equals 1%.

Points are usually paid at closing; Lima One lets flip borrowers defer them to the payoff. Ranges published in October 2026: 0 to 2 points on fix and flip loans (New Silver 1% to 1.75%; Easy Street 0 to 2, plus a $1,995 document fee) and 1 to 2 points on construction.

Weigh points and rate together over the months you’ll actually hold the loan. On a loan repaid in six months, one point costs about the same as two extra percentage points of annual interest.

Example deal1.5 points on the $182,500 loan is $2,737.50, due at closing.

Payments that cover interest and nothing else, so the balance stays put until you pay the loan off.

Flip, bridge and construction loans work this way over their 6- to 24-month terms, and on rehab money you pay interest only once it’s drawn. Many DSCR rental loans offer an interest-only period too, usually the first 10 years, which lowers the payment and lifts the DSCR.

The trade-off arrives at the end: with no principal paid down, the whole balance is still owed at maturity. See balloon payment.

Example dealAt 10.25%, the $130,500 funded at closing costs $1,114.69 a month. Fully drawn at $182,500, it’s $1,558.85.

The remaining loan balance, due in one lump sum on the maturity date.

Every short-term investor loan ends in one. On an interest-only flip loan, the balloon is the entire principal. Some rental portfolio loans balloon too: 5-, 7- and 10-year terms appeared on lender pages in October 2026, even though the payments are worked out over 30 years.

The balloon is why your exit strategy matters more than your rate. If the sale or refinance isn’t done by maturity, you’ll be asking for an extension with little leverage.

Property you buy to rent out or resell, where no one in your family will live. It’s the only kind of loan Fund Your Deal arranges.

Business-purpose loans fall outside most consumer mortgage rules. Regulation Z exempts credit made mainly for business purposes, and its official commentary treats a loan to buy, improve or maintain a rental that isn’t owner-occupied as business credit. The same commentary draws a hard line: plan to stay there more than 14 days over the next year and it can’t be treated as non-owner-occupied.

Expect to sign a business-purpose and occupancy statement at closing. Buying a home that you or a relative will occupy? That calls for a residential mortgage lender, not a business-purpose loan.

A limited liability company that takes title to the property and signs the loan as the borrower.

Every rental lender in our October 2026 research allowed LLC borrowers, and Lima One, Roc Capital and Civic required an entity on DSCR loans. Have the articles of organization, operating agreement and EIN letter ready, and expect the owners to sign a personal guarantee; Griffin, for one, pairs its LLC loans with one.

Whether to form an LLC, in which state and how to own it are questions for your attorney or CPA. We can tell you what lenders ask for, not how to structure your business.

Your personal promise to repay the loan if the LLC that borrowed it can’t.

A new LLC usually owns nothing but the property it’s buying, so lenders commonly ask the owners to stand behind it. After a default, the guarantee lets the lender pursue you, not just the company.

A full guarantee covers the whole debt. A limited, or “bad-boy,” guarantee applies only if you commit specific acts such as fraud, transferring the property without consent or filing for bankruptcy voluntarily, and it’s the usual companion to a non-recourse loan.

Whether the lender can collect from you personally, not only from the property, if a foreclosure sale leaves part of the debt unpaid.

With full recourse, any shortfall after foreclosure can be pursued against you or your guarantors. With non-recourse, the lender’s recovery stops at the property, apart from carve-outs for misconduct.

Published terms split in October 2026. Roc Capital listed its single-property rentals as full recourse only, and Roc and Civic portfolio loans were full recourse; RCN and Lima One offered non-recourse portfolio loans. It’s printed on the term sheet, so check it before you sign.

The title company confirms the seller can pass clean ownership and insures it; the escrow or settlement agent holds the money and documents and closes the deal.

The title search turns up liens, unpaid taxes, judgments and breaks in the ownership chain that have to be cleared before closing. Your lender will want a lender’s title policy protecting its lien; an owner’s policy protecting you is a separate purchase.

Escrow holds your earnest money, collects the loan proceeds and your cash to close, pays off the seller’s mortgage and records the deed. A title problem found late can push a closing back, so open title the day the contract is signed.

How the short-term loan gets repaid: a sale, a refinance into a long-term loan, or one as the backup for the other.

Every bridge, flip and construction lender asks for it, because the balloon at maturity is paid from the exit, not from your paycheck. A credible exit has numbers behind it: comps that support the sale price, or a rent and refinance that clear the next lender’s DSCR and LTV limits.

Run both before you buy. If the market softens while you renovate, the deal that no longer works as a flip may still work as a rental.

Example dealSell at $285,000, or refinance at $213,750: enough to repay the $182,500 rehab loan with $31,250 left before closing costs.

A fix-to-rent strategy: buy and renovate with a short-term loan, lease it, then refinance to pull your cash back out for the next deal.

The refinance is usually a 30-year DSCR loan sized on the new appraisal. LendingOne’s fix-to-rent program lends up to 95% LTC and the whole rehab budget for a 9-month first phase, then refinances at about 75% of ARV; Lima One’s rehab phase runs 13 to 24 months.

Some lenders pay you to do both halves with them, and charge you if you don’t. LendingOne advertised an extra 0.5% off the rate and a 50% origination discount, and tacks one point onto the payoff when you refinance with someone else. Lima One offers up to 50% off origination when you refinance into its rental loan, and waives seasoning.

Example dealCash in: $14,500 down, $2,737.50 in points and about $8,243 of interest, roughly $25,480. The $213,750 refinance repays the $182,500 rehab loan and returns $31,250 before refinance closing costs, taxes and insurance.

The time you must hold a property before a lender sizes a refinance on today’s appraisal instead of what you paid.

Ninety days is the common line. Kiavi published cash-out refinances after 90 days of ownership. Roc Capital uses the appraised value only after 90 days; before that, it lends 80% of your total cost basis. Lima One waives seasoning when it made the rehab loan, and some non-QM lenders, Griffin and Defy among them, advertised no seasoning on cash-out.

This is where refinance timelines break. Go in too early and you may be sized on what you spent, not what the house is now worth.

Example dealRefinance at day 60 under a rule like Roc’s and you get 80% of the $197,000 cost basis, $157,600: $24,900 short of the $182,500 payoff. After day 90, 75% of the $285,000 value is $213,750.

A cash-out refinance taken soon after buying a property with cash, so the purchase money comes back out.

It suits investors who win deals by paying cash, at auction or against financed buyers, and then want that cash back for the next one. Kiavi’s window for this kind of refinance on a cash purchase was 6 months, and Angel Oak’s foreign national program lists delayed financing among its cash-out options.

Expect the lender to ask for the settlement statement from your purchase and proof of where the cash came from.

A new, larger loan that pays off the existing one and hands you the difference in cash.

On investment property, lenders published a maximum of 70% to 80% LTV in October 2026, 75% most often and 60% at some for lower scores. At Easy Street, a refinance becomes cash-out when you take home more than $2,000; at or below that, it’s rate-and-term.

In a BRRRR, this is the step that returns your capital. The new loan has to fit under both the LTV cap and the lender’s DSCR minimum, and the tighter of the two sets the amount.

The full monthly cost of a rental loan: principal, interest, property taxes, insurance and HOA or association dues.

It’s the bottom of the DSCR fraction. Taxes and insurance enter as one-twelfth of the annual bills; the A covers HOA or condo dues and any special assessment. Leave the A off and you have PITI.

The lines that surprise investors are the tax bill after a reassessment at your new value and the insurance quote. Get both in writing while you’re still under contract. Lenders also count reserves in months of PITIA.

Example deal$1,494.57 principal and interest + $290 taxes + $120 insurance + $0 HOA = $1,904.57.

The appraiser’s estimate of a home’s market rent, set out on Fannie Mae Form 1007 (Freddie Mac Form 1000) for single-family property.

The form lines your property up against three comparable rentals, adjusts for location, condition, rooms and size, and ends with the appraiser’s monthly market rent. DSCR lenders weigh that figure against your lease and generally qualify you on the lower one.

If the place is vacant at refinance, the schedule may be all the lender has to go on; Roc counts unleased units at 90% of market rent. Lease at market, not below it, because the lower number is the one that counts.

Example dealLease $2,300, rent schedule $2,350: the lender qualifies the ranch on $2,300.

Nightly-rental income as a lender counts it for a DSCR loan on an Airbnb or vacation rental.

On a purchase there are no bookings yet, so lenders use an AirDNA projection or market rent. On a refinance, lenders such as Easy Street use the last 12 months of actual bookings. Easy Street takes no haircut from professional operators’ income and 25% from newer hosts’.

Terms run tighter than on long-term rentals: Lima One published a 700 minimum score, 75% LTV on purchases and 70% on cash-out. Few lenders publish an STR DSCR minimum; RCN’s was reported at 1.20x.

Cash or liquid assets you still hold after closing, measured in months of PITIA.

They show you can keep paying through a vacancy or a repair. Requirements published in October 2026 ran from none at Kiavi to 3 months at Defy and 3 to 9 months at Easy Street; Angel Oak’s foreign national program asked for 12. Most lenders don’t publish a figure, so ask before you plan your cash.

Example dealThree months of reserves on the ranch is 3 × $1,904.57 = $5,713.71.

A fee for paying a loan off early, usually a percentage of the balance, that shrinks and then disappears over a set number of years.

Standard on DSCR rental loans, rare on short-term ones: Lima One and Kiavi published none on bridge loans. The usual DSCR structure in October 2026 was 5-4-3-2-1, meaning 5% of the balance repaid in year one, one point less each year after, and nothing from year six. Shorter 3-2-1 and 2-1 schedules, a flat 5% and no penalty were offered too, generally for a higher rate. Kiavi’s DSCR loans carry no penalty after year three.

Match it to your plan. If an early sale or refinance is a real possibility in the first three years, buying a shorter schedule up front can cost less than the penalty itself.

Example dealSell the ranch 18 months after the refinance and the 5-4-3-2-1 step is 4% of the $210,737.73 still owed: $8,429.51.

One loan secured by several rentals, with one payment, one closing and one set of documents.

It’s how investors refinance a group of rentals at once, often after a run of BRRRRs. Published minimums in October 2026 ran from 2 to 5 properties (Easy Street wants at least 3 in one state), and LendingOne capped a loan at 20. Purchases went to 60% to 80% LTV and cash-out to 55% to 75%, with DSCR floors of 1.00 to 1.05 and properties around 90% leased.

Structures included 30-year fixed or adjustable loans with 5 to 10 years of interest-only, and 5-, 7- and 10-year balloons.

Pledging several properties together as security, so each one backs the whole debt rather than just its own share.

It’s built into every blanket loan and sometimes added across separate loans with one lender. You get leverage and one closing. In exchange, trouble at one property can pull the others into default, and you can’t sell one until the lender agrees to take its lien off.

Before you sign, get each property’s release price, the paydown needed to free it for a sale, and ask whether you can swap in another property instead.