Chicago Hard Money Loan FAQ
Everything you need to know about hard money loans and working with Illinois' trusted private lender
General Questions
What is a hard money loan?
A hard money loan is a short-term, asset-based loan secured by real estate. Unlike traditional bank loans that focus heavily on credit scores and income verification, hard money loans are primarily based on the property's current value and after-repair value (ARV). Chicago real estate investors typically use these loans for fix-and-flip projects, bridge financing, or situations requiring fast funding. They're ideal for the competitive Chicago market where speed matters.
How fast can I get funded in Chicago?
At SH Private Lenders, we can approve your Chicago loan in 24-48 hours and fund within 7-10 business days. For urgent Illinois properties, we can expedite the process even further. Our streamlined application process and decision-making authority allow us to move much faster than traditional Chicago banks—critical when competing with cash buyers in neighborhoods like Lincoln Park or Logan Square.
What Chicago neighborhoods and Illinois areas do you serve?
We provide hard money loans throughout all of Chicago and Illinois, plus all 50 states. While we're based in Deerfield, Illinois, we have extensive experience funding projects in Lincoln Park, Logan Square, Wicker Park, Pilsen, Lakeview, Hyde Park, Oak Park, Naperville, Evanston, and every other Chicago neighborhood. We also serve the broader Illinois markets including Cook County, DuPage County, Lake County, Will County, and Kane County.
What types of Chicago properties do you finance?
We finance a wide range of Chicago and Illinois property types including single-family homes, multi-family properties (2-4 units and larger apartment buildings), commercial real estate, mixed-use buildings, and land. From historic Chicago bungalows to modern high-rise condos, we evaluate each property individually based on its investment potential, neighborhood, and exit strategy.
Loan Terms & Requirements
What is the typical loan-to-value (LTV) ratio for Chicago properties?
Our LTV ratios typically range from 65% to 75% of the property's current value or purchase price. For Chicago fix-and-flip loans, we also consider the after-repair value (ARV) and may finance up to 90% of the purchase price plus 100% of renovation costs, depending on the neighborhood, deal structure, and borrower experience. Established areas like Lincoln Park may qualify for higher LTV ratios than emerging markets.
What are your Chicago hard money interest rates?
Our Chicago hard money interest rates are competitive and typically range from 9% to 14%, depending on the loan amount, Chicago property location, borrower experience, and overall risk profile. Illinois investors with proven track records in desirable neighborhoods often qualify for rates on the lower end. We provide custom quotes for each Chicago deal because every investment opportunity is unique.
How long are the loan terms for Chicago projects?
Most of our Chicago loans have terms ranging from 6 to 24 months. Fix-and-flip loans for Chicago properties are typically 6-12 months (accounting for Chicago winters that can slow construction), while bridge loans and construction loans may extend to 18-24 months. We can customize the term based on your Chicago project timeline and exit strategy.
Do I need perfect credit for a Chicago hard money loan?
No. While we do review credit as part of our overall assessment, we don't require perfect credit for Chicago loans. We've funded Illinois loans for borrowers with credit scores as low as 600. Our primary focus is on the Chicago property value, your investment experience, and your exit strategy rather than just your credit score. Many successful Chicago investors use hard money precisely because they don't meet traditional bank credit requirements.
What fees should I expect on a Chicago hard money loan?
Our fee structure typically includes origination fees (2-5 points), appraisal fees, Illinois title insurance, and closing costs. All fees are disclosed upfront during the application process—no hidden charges. We believe in transparency and want you to understand the total cost of your Chicago financing. Chicago-area title and closing costs are standard for Cook County transactions.
Is there a prepayment penalty on Chicago loans?
This varies by loan. Some of our Chicago loan products have no prepayment penalty, while others may have a minimal fee if you pay off the loan within the first few months. This is especially relevant for Chicago fix-and-flip projects that may sell faster than expected in hot neighborhoods. We'll clearly explain any prepayment terms before you commit to the loan.
Application & Process
What documents do I need to apply for a Chicago hard money loan?
Our application process is streamlined. Typically, you'll need: Chicago property address and details, purchase contract (if applicable), preliminary renovation budget and scope of work, proof of funds for down payment and reserves, photo ID, and a brief summary of your Chicago real estate investment experience. That's it—much simpler than traditional Illinois bank loans.
What is the approval process for Chicago hard money loans?
Our Chicago approval process is fast and efficient: (1) Submit your application with Chicago property details, (2) We review and provide preliminary approval within 24-48 hours, (3) Chicago property appraisal or evaluation is ordered, (4) Final loan terms are confirmed, (5) Illinois title work and closing documents are prepared, (6) You receive funding, typically within 7-10 days of application.
Do you require property inspections for Chicago properties?
Yes, we typically require a Chicago property appraisal or broker price opinion (BPO) to determine current value and verify property condition. For construction or major renovation loans in Chicago, we may also require periodic inspections before releasing draw funds to ensure the work is progressing as planned—especially important given Chicago's strict building codes and permit requirements.
Can I get multiple Chicago loans at once?
Yes! Many of our successful Chicago clients work on multiple properties simultaneously across different neighborhoods. We offer portfolio lending solutions for experienced Illinois investors managing several properties. Each Chicago deal is evaluated on its own merits, but we value long-term relationships and can provide preferential terms for repeat borrowers with proven Chicago market success.
Chicago Fix-and-Flip Specific Questions
Do you finance renovation costs for Chicago fix-and-flips?
Yes! We can finance 100% of renovation costs for Chicago properties in addition to a portion of the purchase price. Renovation funds are typically released through a draw schedule as work is completed and inspected—accounting for Chicago's Department of Buildings inspection requirements. This helps you preserve your cash for other Chicago opportunities while completing the project.
What if my Chicago project takes longer than expected?
We understand that Chicago renovations don't always go as planned—especially with winter weather delays and Chicago permit processes. We offer loan extensions for projects that need more time, subject to an extension fee. It's important to communicate with us early if you anticipate needing extra time. We're here to help you succeed with your Chicago investment, not penalize you for construction delays.
Can I use my own Chicago contractors?
Absolutely. You have complete freedom to choose your Chicago contractors and manage your project. We don't require you to use specific vendors. We just need to review your renovation budget and contractor agreements to ensure the scope of work supports your projected ARV. We recommend contractors experienced with Chicago building codes and permit requirements.
What happens if my Chicago property doesn't sell?
If your Chicago property doesn't sell before the loan matures, you have several options: (1) Request a loan extension to give you more marketing time in the Chicago market, (2) Refinance into a longer-term rental loan if you decide to hold the Chicago property, (3) Work with us to restructure the loan terms. We're invested in your Chicago success and will work with you to find the best solution.
How do Chicago winters affect fix-and-flip timelines?
Chicago's harsh winters can add 2-4 weeks to renovation timelines, especially for exterior work like roofing, masonry, or foundation repairs. We factor this into our loan terms for projects starting in fall or winter. Plan exterior work for warmer months (April-October) and keep properties heated to prevent pipe damage. We understand Chicago's seasonal challenges and structure loans accordingly.
Do you understand Chicago's unique building codes and permits?
Yes! Chicago has specific building codes, permit requirements, and inspection processes that can significantly impact renovation timelines. Our team is familiar with Chicago's Department of Buildings requirements, aldermanic approval processes in certain districts, and common permit challenges for projects in historic districts or landmark buildings. This knowledge helps us provide realistic timelines and budgets for your Chicago projects.
More Chicago & Illinois Questions
Do you have special expertise in Chicago real estate?
Yes! While we serve all 50 states, we're based in Deerfield, Illinois, and have deep knowledge of the Chicago metropolitan area since 2020. We understand Chicago neighborhood dynamics, property values, market trends, and local regulations throughout Cook County, DuPage County, Lake County, and surrounding Illinois areas. This local expertise helps us evaluate Chicago deals more accurately and close faster than out-of-state lenders.
Which Chicago neighborhoods offer the best fix-and-flip returns?
We finance projects throughout Chicago, and returns vary by neighborhood and strategy. Established areas like Lincoln Park and Lakeview offer consistent returns with faster sales. Emerging neighborhoods like Logan Square, Pilsen, and Bridgeport often provide higher profit margins but may take longer to sell. We help evaluate which Chicago neighborhoods align with your investment goals, risk tolerance, and capital. Each neighborhood requires different approaches to renovation budgets and target buyers.
How do Chicago property taxes affect my investment?
Chicago has some of the highest property taxes in the nation—typically 2-3% of property value annually. For fix-and-flip projects, budget $500-$2,000+ monthly for property taxes during your hold period. These taxes are a significant holding cost in Chicago compared to other markets. We factor Chicago's high taxes into our underwriting to ensure your project remains profitable. Always verify exact tax amounts before purchasing, as they vary by neighborhood and Cook County assessments.
What about Chicago's transfer taxes when I sell?
Chicago has a combined state, county, and city transfer tax totaling approximately 1.05% of the sale price (0.75% Chicago city transfer tax + 0.25% Cook County + 0.05% Illinois state). On a $500,000 sale, expect about $5,250 in transfer taxes. This is higher than most U.S. cities and should be factored into your exit costs. Some transactions may qualify for tax exemptions—consult with your Chicago real estate attorney.
Do you fund projects in Chicago's historic districts?
Yes, but with additional considerations. Chicago has numerous historic districts (like Old Town, Prairie District, and parts of Hyde Park) where exterior changes require approval from the Commission on Chicago Landmarks. These approvals add 4-8 weeks to timelines and may restrict certain renovations. We've funded many historic district projects and understand the additional requirements. Interior renovations have more flexibility, but we recommend experienced contractors familiar with historic preservation standards.
What makes SH Private Lenders different from other Chicago hard money lenders?
As a Deerfield-based Illinois lender, we combine local Chicago market expertise with competitive nationwide rates. We've funded over $50 million in loans and 200+ Chicago-area projects since 2020. Our 7-10 day closings beat most competitors. We understand Chicago's unique challenges—harsh winters, complex permits, high taxes, and diverse neighborhoods—and structure loans accordingly. Plus, we're investors ourselves, so we evaluate deals the way you do, focusing on profit potential rather than just checking boxes.
Still Have Questions About Chicago Hard Money Loans?
Our experienced team is here to help. Get in touch and we'll answer any questions about your specific Chicago project and financing needs.