Hard Money Lenders Chicago: Top Choices and Alternative Financing Options

Published on December 11th, 2025
13 min read

Sam Dadofalza Associate Editor
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Sam Dadofalza Associate Editor

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Sam Dadofalza is an associate editor at HomeLight, where she crafts insightful stories to guide homebuyers and sellers through the intricacies of real estate transactions. She has previously contributed to digital marketing firms and online business publications, honing her skills in creating engaging and informative content.

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Considering a real estate investment in the Windy City? Hard money loans might be a worthwhile financing option to explore. Whether you’re planning to flip a historic greystone in Lincoln Park or invest in a rental property in Logan Square, hard money lenders in Chicago can offer faster approval times and more flexibility compared to traditional bank loans. They can be especially helpful for investors facing tight deadlines, limited funds, or credit challenges.

If you’re not a seasoned real estate investor and simply need cash to keep yourself afloat between buying and selling a home, we’ll discuss several alternatives to make use of your home’s equity. In this article, we’ll go over the basics of hard money lending in Chicago to help you decide whether this financial tool aligns with your real estate investment or home-buying needs.

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What’s the Best Way to Buy a House Before You Sell Yours? Learn more

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How to Buy a House Before You Sell Yours (Without the Hassle!) Learn more

What is a hard money lender?

A hard money lender is a private individual or company that provides short-term loans secured by real estate. Unlike traditional lenders, who emphasize the borrower’s creditworthiness and income, hard money lenders in Chicago focus on the value of the property being used as collateral.

Their loan programs are popular among real estate investors, such as house flippers and rental property buyers, who need quick access to funds and flexible terms. To determine the loan amount, hard money lenders consider the after-repair value (ARV), the estimated value of a property after renovations and repairs are completed. They usually lend a percentage of the ARV to ensure the investment’s profitability and security.

Hard money loans usually have higher interest rates, ranging from 8% to 15%, and shorter repayment periods, typically between six to 24 months. Additional costs include origination fees, closing costs, and points, which are a percentage of the loan amount paid upfront. If a borrower fails to repay a hard money loan, the lender can seize the property to recover their investment.

How does a hard money loan work?

If you’re a real estate investor in Chicago seeking a financing option that offers quick and flexible funding, hard money lenders might be the right fit for you. Here’s an overview of how hard money loans operate in the Windy City:

Short-term loan: Hard money loans typically have a repayment period ranging from six to 24 months, unlike traditional mortgages that span 15 or 30 years. Some lenders might offer extensions of up to 36 months.
Faster funding: Hard money loans can be processed and approved within days, a stark contrast to the 40 to 50 days often required for conventional mortgage loans.
Less focus on creditworthiness: Approval is based more on the property’s value than on the borrower’s credit score or income history.
Greater scrutiny on the collateral: These loans are secured by collateral, such as a home, and the loan amount is determined by the loan-to-value ratio of the property.
Non-traditional lenders: Hard money loans are usually provided by private investors or companies rather than traditional banks.
Loan denial: Borrowers who have been denied a mortgage due to poor credit but have significant home equity may find hard money loans a viable option.
Higher interest rates: These loans come with higher interest rates compared to traditional mortgages due to the increased risk for lenders.
Larger down payments: Borrowers may need to make a substantial down payment, sometimes up to 20% or 30%, depending on the loan and property specifics.
More flexibility: Hard money lenders in Chicago can offer more flexible terms regarding credit scores and debt-to-income ratios, helping borrowers avoid foreclosure.
Interest-only payments: Borrowers may have the option to make interest-only payments initially, which is different from the structure of traditional mortgages.

What are hard money loans used for?

Hard money loans are popular among real estate investors who need quick, flexible financing. They’re often used for deals that don’t fit traditional lending timelines or requirements. Here’s a look at the most common ways investors use them.

Flipping a house: If you’re flipping homes in Chicago, hard money loans can help you move fast: buy the property, fix it up, and get it back on the market. This kind of financing gives you the quick turnaround you need to secure competitive deals, handle the renovations, and flip for a profit without getting stuck waiting on bank approvals.

Buying an investment rental property: If you’re investing in rental properties, hard money loans give you a fast way to buy and repair a place. Unlike traditional bank loans, they help you finish renovations sooner so you can start earning rental income right away.

Purchasing commercial real estate: Hard money loans are useful in commercial real estate due to their flexibility and fast approval process. This is particularly beneficial in situations where timing is crucial, helping investors secure valuable properties without delay.

Looking for alternatives to traditional loans: If you have a lot of equity but your credit isn’t great, hard money lenders can be an option. These loans focus more on your property’s value than your credit score when it comes to approval.

Homeowners facing foreclosure: If you’re close to foreclosure, you may use hard money loans to refinance your debt or buy time to sell your property. This can provide a temporary solution to avoid foreclosure and the negative impact on your credit.

How much do hard money loans cost?

Hard money loans generally cost more than traditional loans due to the higher risk and convenience of quick funding. Here’s a breakdown of some of the typical costs involved:

			
			Interest rates: These can range from 8% to 15%, depending on the lender’s risk assessment.
Origination fees: Lenders may charge 1% to 5% of the total loan amount.
Closing costs: Additional fees at closing can include legal fees, appraisal fees, and administrative costs.
Points: Lenders might charge points (a percentage of the loan amount) upfront, adding to the initial cost.

You can use online hard money loan calculators to estimate your total costs.

Alternatives to working with hard money lenders

If you’re not an investor, but rather a homeowner looking to leverage your home’s equity, here are a few alternatives to consider:

Take out a second mortgage: If you have substantial equity, a home equity loan or home equity line of credit (HELOC) can provide funds at a lower interest rate compared to a hard money loan.

Cash-out refinance: This option allows you to refinance your existing property and pull out cash to finance new investments, often with lower interest rates than hard money loans.

Borrow from family or friends: A personal loan from family or friends can offer flexible repayment terms and potentially lower or no interest rates, making it a more affordable option.

Use a government-backed loan program: Programs like the FHA, VA, or USDA can help with purchasing homes through lower down payments and reduced interest rates.

Consider a peer-to-peer loan: These loans are provided by individual investors through lending platforms, functioning similarly to hard money loans but often with different terms.

Explore specialized loan programs: Consider specialized loans for fixer-uppers or refinancing investment properties if you want to replace an existing hard money loan.

Request a seller financing option: In some cases, sellers may agree to finance the purchase themselves, which can result in lower closing costs and less stringent eligibility requirements.

How to buy before you sell

Sometimes, the perfect listing just pops up out of nowhere. Maybe it’s a penthouse unit with a rooftop deck or a 1930s Chicago bungalow. If you’re a local homeowner wanting to buy a new home before selling your current one, HomeLight has an innovative solution to simplify the process.

The Buy Before You Sell (BBYS) program lets you use the equity in your current home to make a strong, non-contingent offer on a new property. If your home qualifies, you can get your equity unlock amount approved within 24 hours, with no upfront cost or commitment. Once approved, you can purchase your new home and sell your existing one vacant, eliminating the stress of moving twice.

Here’s how HomeLight Buy Before You Sell works:

While the program charges a flat fee based on your current home’s sale price, the potential savings in other areas can outweigh this cost. You might save on moving expenses, temporary housing, and even secure a better price on your new home. Additionally, HomeLight’s BBYS fees are generally much lower than bridge loan interest rates, which currently range from 9.5% to 12%.

3 top hard money lenders in Chicago

Finding the right hard money lender can make or break your real estate deal in Chicago. You want someone who can move quickly and actually understands the local market. Below are three lenders that consistently stand out.

Chicago Hard Money

Chicago Hard Money is a local hard money and bridge loan provider serving investors in Chicago, the surrounding suburbs, and areas up to an hour outside the city. The firm offers fast turnaround times, with loan approvals often completed within days and most closings ready within a week.

Its process is hands-on, beginning with an introductory call followed by an on-site meeting at the property. All valuation work is completed in-house to eliminate added costs and delays for borrowers. Loan terms typically extend up to 18 months, providing flexibility for a range of investment needs.

Lending clientele: Residential real estate investors

Loan criteria: Up to 65% LTV

Chicago Hard Money and Bridge Loans has earned a 4.9-star rating on Google, with several clients praising the employees’ attentiveness, prompt responses, and transparency. They highlight the company’s ability to fund loans quickly, often faster than any other lender they’ve worked with in decades. Many appreciate the minimal requirements and efficient closings, making this team a top recommendation for reliable, hassle-free financing.

Website: chicagohardmoney.com

Phone number: 773-245-6265

Lima One Capital

Since its founding in 2011, Lima One Capital has been dedicated to empowering real estate investors to improve properties, neighborhoods, and communities. Founded by two U.S. Marine Corps veterans, the company approaches every deal with the grit, determination, boldness, and integrity that reflect its Marine Corps roots.

Over the years, Lima One has set the standard for private lending excellence, serving thousands of clients across 46 states, including Illinois. The team has successfully closed over 29,000 loans, generating more than $10 billion in funding for real estate investors.

Lending clientele: Residential and commercial real estate investors

Loan criteria: LTV 70% up to 80% of ARV

Accredited with the BBB since 2013, Lima One Capital reflects an A+ rating. Its Google Business Profile received 4.2 stars from satisfied clients. Some share that they’ve partnered with the company for several years, successfully financing rental properties and fix-and-flip projects in different places. Others appreciate the team’s market expertise, responsiveness, and professional yet approachable style.

Lima One provides competitive rates and financing solutions tailored to investment goals, helping clients grow their single-family rental portfolios. Their consistency, transparency, and dedication to investor success have made them a trusted partner.

Website: limaone.com

Phone number: 800-390-4212

Breclaw Capital

Breclaw Capital is a private money lender based in Chicago, offering five distinct loan programs to finance residential and commercial investment properties. The company supports a range of investor needs, including house flips, rental renovations, and cash-out refinancing. Borrowers can expect a streamlined process, with loan closings typically completed within three weeks after applying.

Lending clientele: Residential and commercial real estate investors

Loan criteria: Up to 90% of the purchase price, and 100% of rehab cost up to 65% of the after-repair appraised value

Earning the praises of past clients, Breclaw Capital reflects a perfect 5-star Google rating. Various clients recognize the staff’s patience, honesty, and willingness to go above and beyond. Some say that the company representatives deliver a personal touch that makes the lending process simple and stress-free.

They highlight the team’s quick responses and straightforward approach. Many recommend them and plan to use their services again for future lending needs.

Website: breclawlenders.com

Phone number: 708-680-2090

Should I partner with a hard money lender in Chicago?

Whether a hard money loan is right for you depends on your goals. This type of financing is great for Chicago real estate investors who need fast cash, especially for quick-flip projects or when banks aren’t an option. If you’re ready to handle higher interest rates and shorter payback times in exchange for fast, flexible funding, it might be worth reaching out to a Chicago hard money lender for your next project.

On the other hand, if you’re a homeowner who wants to leverage your home’s equity, HomeLight’s Buy Before You Sell program may be a better alternative. This program allows you to make a competitive offer on a new home while paying a small flat fee, avoiding the high interest rates associated with hard money loans and simplifying your move.

Like with any big financial move, it’s smart to think about your long-term plans and chat with a financial advisor to make sure it fits with your overall investment goals. If you’re looking for investor-friendly real estate agents in Chicago who can connect you with trusted hard money lenders, HomeLight can introduce you to top professionals in your area.

Header Image Source: (Austin Neill/ Unsplash)

At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.

Sam Dadofalza

Associate Editor

Sam Dadofalza is an associate editor at HomeLight, where she crafts insightful stories to guide homebuyers and sellers through the intricacies of real estate transactions. She has previously contributed to digital marketing firms and online business publications, honing her skills in creating engaging and informative content.