Hard Money and Private Money loans are in much demand today and for a variety of reasons. Perhaps a property is available but the inside is in rough shape where a conventional lender would not make the loan. Or perhaps an investor wants to purchase property today but he already has a bunch of houses and no lender will loan to him because he has too many mortgages. Maybe someone wants to buy a home and they do not have any credit, or poor credit. Possibly one is in trouble, credit isn't good and getting cash out of a property is needed to solve a problem.

Hard money and private money loans are higher cost and higher interest rate loans, but they have their purpose and thus are becoming more and more in demand.

The definition of a Hard Money loan is:

A hard money loan is a specific type of asset-based loan financing through which a borrower receives funds secured by the value of a parcel of real estate. Hard money loans are typically issued at much higher interest rates than conventional commercial or residential property loans and are almost never issued by a commercial bank or other deposit institution. Hard money is similar to a bridge loan, which usually has similar criteria for lending as well as cost to the borrowers. The primary difference is that a bridge loan often refers to a commercial property or investment property that may be in transition and does not yet qualify for traditional financing, whereas hard money often refers to not only an asset-based loan with a high interest rate, but possibly a distressed financial situation, such as arrears on the existing mortgage, or where bankruptcy and foreclosure proceedings are occurring.

Many hard money mortgages are made by private investors, generally in their local areas. It used to be the credit score of the borrower was not important, that is changing today.  The loan is secured by the value of the collateral property. Typically, the biggest loan one can expect would be between 65% and 70% of the property value. That is, if the property is worth $100,000, the lender would advance $65,000–70,000 against it. This low LTV (loan to value) provides added security for the lender, in case the borrower does not pay and they have to foreclose on the property. A private lender is not interested in taking back the property. he wants to earn interest on his money.