Hard Money Lending to Help Solve California’s Housing Shortage

Home For Sale Real Estate Sign in Front of New House.
source: bigstock

Since around 1970, California has been experiencing a continuing and ever-growing housing shortage. So much so, that California, itself the world’s 5th largest economy, was ranked 49th among the states of the U.S. in terms of housing units per resident in 2018.

Housing affordability has also suffered. California has seen a steady affordable housing decline over the last three decades. By 2018, less than a third of Californians were able to afford a median-priced home.

One way to help ease the housing shortage is to turn some of the 1.2 million vacant homes in California into residences, Many of these vacant properties are in bad shape and need work doing to them. Being unmortgageable, the funds needed to purchase the property, renovate and flip it, have to come from somewhere. This is where a hard money lender California-based comes into play.

Hard money lenders are scattered all over California. Hard money lender Los Angeles, San Fransisco, San Diego; Californians have plenty of local options for financing real estate investments that traditional lending institutions would either outright refuse or drag their feet imposing often unfavorable terms and conditions.

Hard money lenders in California help solve the housing shortage by enabling people to buy, repair, and immediately resell a property. Whereas traditional lenders tend to focus on an applicant’s credit score, private money lending institutions base their lending decisions more upon a property’s equity. It is the investment property, not someone’s personal finances and credit score that secures the loan. Stellar credit history is not needed to be approved for hard money loans, making them accessible to anyone with the development project.

The short term loans based on the equity of the property are typically between three months and two years, allowing whilst the underwriting and funding process can be completed in just a few days, meaning from start to finish hard money lenders in California can help ease the housing shortage by helping fund the renovations of properties currently vacant.

Whilst renovating California’s dilapidated and vacant homes will not solve the State’s housing shortage alone, it offers a practical long-term solution. Vacant homes are no good to anyone. They do not earn rental money and there are people that need that home.

The speed, flexibility, and pragmatic approach to hard money lending in California can provide a much-needed and reliable source of funds that can be used to finance the development of not just properties, but whole neighborhoods.

More is needed to help solve the Californian housing shortage, including state intervention. However, renovating old empty properties is a good start.

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