HML's and PML's

[Pat A]

I was just reading various topics and I saw a lot of HML's and PML's wording. I thought they are the same but not sure.

Are they the same? What the difference? (I couldn't find it when I googled it)

[Don Konipol]

Hard Money Loan - A loan that is underwritten with the condition and value of the property as the primary criteria for approval. Secondary issues may include the ability of the borrower to repay the loan and/or the ability of the borrower to manage the property or successfully complete a rehab and sell the property. Owner occupancy, debt ratios and other issues are seldom a factor. Appraisals are another key benefit. These loans are usually approved within days and are often funded in two weeks or under with times as short as two or three days not uncommon. The cost for the benefits of speed of funding, lax underwriting and other advantages is typically a moderately high interest rate (usually low to mid teens) and high points (usually 5 to 10).

Private Money Loan - A loan from an individual rather than an institution. The loan will have criteria different from institutional loans unique to the individual offering the loan.

There can be and often is an overlap between hard money and private mortgage loans.