Which of the following is true about hard money loans?

Hard money loans are primarily characterized by being secured by real estate. This means that the loan is backed by a tangible asset, usually in the form of property, which provides collateral for the lender. This security enables lenders to mitigate risk, as they can recoup their funds by taking possession of the property if the borrower defaults on the loan.

In contrast to conventional loans, hard money loans often come with higher interest rates due to the perceived risk by lenders and the shorter time frames typically involved. They are also not documentation-free; while they do require less documentation than conventional loans, especially when compared to traditional bank underwriting processes, some basic documentation is still necessary. Additionally, hard money loans are available to a broad range of borrowers, not just institutional investors, which further highlights the flexibility and accessibility of these types of loans for various real estate purposes, including personal investment.