How soon can I refinance out of a hard money loan?
You can refinance out of a hard money loan as soon as the property is finished and rented, and a permanent lender will typically let you use the new appraised value after 3 to 6 months of ownership for a rate-and-term refinance, or 6 to 12 months for cash-out. Most exits from hard money go into a DSCR loan for a rental, a bank or credit union loan, or a longer bridge loan when the property is not stabilized yet.
The 3 conditions that have to be true
- The work is done. The property is rent-ready, and any permits have been closed out.
- It is producing income, or can. For a DSCR loan, that means a lease in place or an appraiser's market rent that covers the new payment.
- Seasoning is met. Lenders set a minimum time on title before they will use the new appraised value instead of your purchase price.
| Refinance type | Typical seasoning to use appraised value | Typical maximum LTV |
|---|---|---|
| Rate and term (pay off hard money, no cash back) | 0 to 6 months, many lenders at 3 | 75 to 80 percent |
| Cash-out | 6 to 12 months | 70 to 75 percent |
| Delayed financing (cash purchase, recoup funds) | 0 to 6 months, limited to your cost basis | 70 to 75 percent |
If you are under the seasoning period, some lenders will still refinance using the lower of purchase price plus documented improvements or appraised value, which often still pays off the hard money loan.
Timing against the hard money maturity
Hard money loans typically run 6 to 18 months. Line up the refinance to close before maturity with a cushion, since extension fees and default rates on hard money are expensive. If the renovation runs long, request the hard money extension early rather than rushing an underprepared refinance.
Credit check before you assume you're ready
Hard money lenders often skip or barely check credit. Pull your own credit during the hard money term, not after, so there is time to fix a score that falls short of the permanent lender's typical 660 minimum.
A worked example
Hard money loan of $315,000 on a purchase of $260,000 plus $70,000 rehab. Renovation finishes at month 4, leased at $2,900 by month 5. At month 6, seasoning is met for a rate-and-term refinance, the appraisal comes in at $460,000, and a DSCR refinance at 75 percent produces $345,000, paying off the hard money loan and covering closing costs with a coverage ratio near 1.24.
How CommFi handles it
Our lending desk prices the exit refinance alongside the hard money loan from day one, so credit, coverage, and timing are confirmed before you close the first loan. It funds direct when it fits, and when a specific lender's seasoning rule is the better match, the desk searches a database of 7,000+ lenders and the ones that fit compete for the file. Zero upfront fees.
Related reading
Related questions
- How soon can I refinance out of a hard money loan?
- As soon as the property is finished and rented, typically 3 to 6 months for a rate-and-term refinance, sooner than the 6 to 12 months needed for cash-out.
- What has to be true before I can refinance out of hard money?
- The renovation must be complete, the property rented or supported by market rent, and the lender's seasoning period met.
- Should I check my credit before the hard money loan matures?
- Yes. Hard money lenders often skip credit checks, so confirm your score meets the permanent lender's typical 660 minimum with time to fix it if not.
- What if my hard money loan matures before I can refinance?
- Request an extension in writing before maturity, ideally 30 to 60 days ahead, since extension fees are far cheaper than a default.
- Can I refinance before the standard seasoning period if the value is documented?
- Some lenders will use the lower of purchase price plus documented improvements or appraised value even before standard seasoning is met.
Property developer and licensed appraiser. 22+ years in real estate: TIC conversions, multi-unit redevelopments, mixed-use, fix and flips, commercial DSCR.