Owner Occupied Hard Money Lenders Serving California Since 2006
Most hard money lenders will not lend on a home the borrower lives in. Ask ten of them for a hard money loan for a primary residence and most will decline before hearing the details, because owner occupied lending carries consumer protection requirements that investment property lending does not. PB Financial Group is one of the few California owner occupied hard money lenders that has built its underwriting and disclosure process around those requirements. Since 2006 we have funded owner occupied hard money loans throughout the state for homeowners who could not fit inside a bank’s guidelines but had real equity and a sound reason to borrow.
This page explains how a hard money loan for primary residence properties works in California, the difference between a consumer purpose and a business purpose loan, the terms we offer, and when this financing makes sense. It also covers when it does not, because hard money loans for primary residence borrowers are only a good idea with a clear exit. If you already know what you need, call (877) 700-3703 or apply online and a loan officer will review your scenario directly.
What Is an Owner Occupied Hard Money Loan?
An owner-occupied hard money loan is secured by the property you live in as your primary residence and funded by a private lender rather than a bank. Like any hard money loan, it is underwritten primarily on equity and the overall strength of the transaction rather than on a credit score or debt to income ratio alone. That makes it an option for self-employed borrowers, borrowers with recent credit events, and anyone whose timeline or paperwork does not satisfy conventional underwriting.
The key difference from an investment property loan is regulation. When the collateral is a primary residence, the federal Truth in Lending Act and California lending law add disclosure, licensing, and documentation requirements designed to protect homeowners. Those rules are why most private lenders avoid owner occupied hard money altogether. They are also why it matters that your lender is a licensed California mortgage lender with experience structuring these loans correctly, rather than an investor who treats a home like a fix and flip.
Hard Money Loans for a Primary Residence: Consumer Purpose vs. Business Purpose
Every hard money loan on a primary residence falls into one of two categories, and the category determines how the loan is documented, how quickly it can close, and what the lender must verify. PB Financial Group offers both. Knowing which one applies to you tells you what to expect and which lenders can actually help.
Consumer Purpose Loans (Full Documentation)
A consumer purpose loan is one where the money is used for personal, family, or household needs, such as paying off personal debt, funding a home improvement, or catching up on a mortgage. Because the loan is secured by your home and used for personal purposes, it is covered by the federal ability to repay rule, which requires the lender to verify and document your income and assets and make a good faith determination that you can afford the payments. Stated income is not permitted on a consumer purpose loan secured by a primary residence, so these are full documentation loans.
Consumer purpose loans also carry federally mandated disclosures with required waiting periods between application and closing, so they cannot close in a matter of days. What they offer instead is stability. We can structure consumer purpose loans from 11 months of interest only payments to fully amortized terms of up to 30 years, which gives a homeowner a long-term solution rather than a short bridge. Borrowers with verifiable income who fall outside agency guidelines because of credit history, a recent bankruptcy or foreclosure, or an unusual ownership structure are the typical fit.
Business Purpose Loans (Stated Income)
A business purpose loan is one where the proceeds are used primarily for business or investment purposes, such as capitalizing a company, purchasing an investment property, or covering a business tax obligation. Federal consumer lending rules do not apply to business purpose loans, even when the collateral is your primary residence, so the lender can underwrite on the property and the borrower’s overall financial picture rather than on documented income. These are the stated income loans most people picture when they think of hard money, and they close far faster than a consumer purpose loan.
The trade off is that the business purpose has to be real and documented. We will ask how the funds will be used, and that use has to be primarily for business rather than personal needs. Lenders who skip this step, or who coach borrowers to mislabel a personal loan as a business loan, expose both parties to serious legal risk. PB Financial Group documents the purpose of every owner-occupied loan properly, which is one reason we have lent on primary residences continuously since 2006.
Owner Occupied Hard Money Loan Terms
The parameters below apply to owner occupied hard money loans at PB Financial Group. Every loan is priced on its own scenario, and California mortgage law prevents us from publishing rates or costs without a full annual percentage rate disclosure, so pricing is quoted after we review your situation. What we can state up front is the box we lend inside.
| Parameter | Owner Occupied Program |
|---|---|
| Maximum loan to value | 65 percent in first position; up to 60 to 65 percent combined loan to value in second position |
| Loan amounts | $50,000 to $5,000,000 |
| Loan terms | 11 months interest only through 30 years fully amortized |
| Loan types | Consumer purpose (full documentation) and business purpose (stated income) |
| Lien position | First position and second position |
| Eligible properties | Single family residences, condominiums, PUDs, and 1 to 4 unit properties where the borrower occupies one unit |
| Area served | All 58 California counties |
Two of these deserve explanation. The 65 percent cap means a homeowner with a $1,000,000 property and a $400,000 first mortgage could access up to $250,000 through a second position loan at a 65 percent combined loan to value, subject to underwriting. On 2-to-4-unit properties the loan is still owner occupied as long as you live in one of the units. For property types beyond four units, including apartment buildings, mixed use, retail, office, industrial, land, warehouses, and mobile home parks, see our commercial hard money loans page, since those are not owner-occupied loans under the rules described above
When California Homeowners Use an Owner Occupied Hard Money Loan
The most common reason is time. A homeowner with a notice of default on file, a tax lien to resolve, or a balloon payment coming due on an existing private loan cannot wait two or three months for a bank. A foreclosure bailout loan secured by the primary residence pays off the defaulting lender, stops the sale, and gives the homeowner room to sell or refinance on their own terms. Many of our owner-occupied hard money loans in California start with a call from someone who has been told no by three lenders and has weeks, not months, to solve the problem.
The second most common reason is documentation. Self-employed borrowers, business owners who take large write offs, and borrowers with a recent bankruptcy or a low FICO score are often turned down by banks even when they have substantial equity and a clear plan. Hard money loans for owner occupied homes on a business purpose basis let a business owner tap home equity to fund a company, buy an investment property, or cover a business obligation without months of paperwork for a lender that will decline anyway.
The third reason is a transition. Homeowners going through probate, a trust distribution, or a divorce often need to buy out another party or pay estate obligations while the property is still in flux. A probate or estate loan secured by the residence can fund that buyout so the home stays in the family. Bridge situations are similar: a homeowner buying a new primary residence before the current one sells may use a hard money loan on primary residence equity to close the purchase and repay it from the sale proceeds.
Owner Occupied Hard Money Refinance Options
Our hard money refinance owner occupied program works the same way as a purchase loan, with the same consumer purpose and business purpose distinction. Homeowners refinance into a private loan either to replace a loan that is about to become a problem or to pull cash out of equity for a use the bank will not finance. In both cases we look at the current lien, the equity position after the new loan, and how the loan will be paid off.
Rate and term refinances are common when an existing private loan is maturing and the borrower is not yet ready for conventional financing. Cash out refinances are common for business owners and for homeowners consolidating higher cost debt. Where the refinance is consumer purpose, a fully amortized term of up to 30 years can turn a short-term problem into a stable long-term loan. Where it is a business purpose, a shorter interest only term keeps payments low while the business use of the funds plays out.
How the Owner Occupied Loan Process Works
The process begins with a conversation. You call (877) 700-3703 or submit the short form on this page, and a loan officer asks about the property, the existing liens, the amount you need, and what the funds are for. That last question is not a formality; it determines whether the loan is for consumer purpose or business purpose and which documentation and disclosure path we follow. Within that first conversation we can usually tell you whether the scenario fits and what the structure would look like.
From there we order a valuation, collect the documentation appropriate to the loan type, and issue the required disclosures. For a business purpose loan the documentation is light and the timeline is short. For a consumer purpose loan we verify income and assets and observe the required disclosure periods before closing. Either way, you deal with the same people from the first call through funding, and you can see the kinds of loans we have funded on our closed transactions page.
Hard Money vs. HELOC vs. Cash Out Refinance on a Primary Residence
A home equity line of credit or a conventional cash out refinance will almost always be cheaper than hard money for a primary residence, and if you qualify for one and have the time to close it, you should take it. Banks decline those products for the same reasons they decline purchase loans: credit score, documented income, debt to income ratio, and property condition, and a HELOC on a property with a notice of default or an existing private lien is usually not available at all. Owner occupied hard money fills that gap because it is underwritten on equity, can be structured around a business use of funds a bank would not consider, and can be in place in a fraction of the time. The cost of that flexibility is a higher rate and points. The fair comparison is not hard money versus a HELOC in the abstract, but hard money now versus no loan at all, or versus a HELOC in six months once the credit or documentation issue has been resolved.
When an Owner Occupied Hard Money Loan Is Not the Right Fit
We decline owner occupied loans regularly, and the reasons are worth knowing in advance. If the requested loan would push the combined loan to value past our limits, the loan will not work. If a consumer purpose borrower cannot document the ability to repay, federal law does not allow us to make the loan regardless of equity. And if a borrower’s plan for paying the loan off is unclear, we will say so, because a hard money loan without an exit strategy is a loan that ends badly.
A sound exit strategy is a sale, a refinance into conventional financing once credit or income has recovered, a business event that produces the funds, or a fully amortized consumer purpose loan that is simply paid over its term. What is not a sound exit is hoping. Part of our job as a licensed California lender is to tell a homeowner when the loan they are asking for would leave them worse off.
Why California Borrowers Choose PB Financial Group for Owner Occupied Hard Money
PB Financial Group is a direct private money lender licensed by the California Department of Real Estate under license number 01522495 and registered with the Nationwide Multistate Licensing System under NMLS number 357614. You can verify both through the DRE license lookup and NMLS Consumer Access. Founded in 2006 by Pouyan Broukhim, the company has funded more than 2,400 loans across 58 California counties, including many residential hard money loans on owner occupied properties that other private lenders would not consider.
In practice that means we know the rules, we structure hard money owner occupied loans to comply with them, and we do not waste your time. If a scenario cannot be done, we say so on the first call. If it can, you get a clear description of the structure, the documentation we need, and the timeline. Homeowners looking for hard money lenders for owner occupied homes, or owner-occupied private money lenders in California who understand the difference between a business purpose and a consumer purpose loan, are who this program was built for.
Frequently Asked Questions About Owner Occupied Hard Money Loans
Can I get a hard money loan on my primary residence in California?
Yes. PB Financial Group funds hard money loans secured by owner occupied primary residences throughout California. Because the collateral is your home, the loan is subject to additional federal and state consumer protection requirements, and the structure depends on whether the funds are for a consumer purpose or a business purpose. A licensed lender with owner occupied experience can walk you through which program applies.
What is the difference between a consumer purpose and a business purpose owner occupied loan?
A consumer purpose loan is used for personal, family, or household needs and is covered by the federal ability to repay rule, so the lender must verify your income and assets with full documentation. A business purpose loan is used primarily for business or investment needs, is not subject to those consumer rules, and can be underwritten on a stated income basis. The use of funds determines the category, and the lender must document that use.
How much can I borrow against my primary residence with a hard money loan?
Owner occupied hard money loans at PB Financial Group range from $50,000 to $5,000,000. The maximum loan to value is 65 percent in first position, and up to 60 to 65 percent combined loan to value in second position. The actual amount depends on the property value, existing liens, the loan purpose, and the rest of the underwriting.
Do I need good credit to qualify for an owner occupied hard money loan?
Not necessarily. Hard money loans are underwritten primarily on equity and the overall strength of the transaction rather than on credit score alone, so borrowers with recent credit events, a prior bankruptcy, or a low FICO score are often approved. For consumer purpose loans we still must verify that you have the ability to repay, but that is a documentation question rather than a credit score threshold.
How long are owner occupied hard money loan terms?
Terms range from 11 months interest only to 30 years fully amortized. Shorter interest only terms are typical for business purpose bridge scenarios, while longer fully amortized terms are available for consumer purpose borrowers who need a stable long term loan rather than a short bridge. The right term depends on your exit strategy.
Can I refinance my primary residence with a hard money loan?
Yes. Owner occupied hard money refinance loans are used to replace a maturing private loan, pay off a defaulting lender, or pull cash out of equity for a business or consumer use. The same consumer purpose and business purpose distinction applies to a refinance as to a purchase loan.
How fast can an owner occupied hard money loan close?
It depends on the loan type. Business purpose loans have light documentation and can close quickly once the valuation and title work are complete. Consumer purpose loans are subject to federally required disclosures and waiting periods between application and closing, so they take longer than a business purpose loan but still typically move faster than a bank.
What are the rates and costs on an owner occupied hard money loan?
Rates and costs are quoted after we review your specific scenario. California mortgage law does not permit us to publish rates or costs without providing a full annual percentage rate disclosure, so we do not list generic pricing on this page. Call (877) 700-3703 and a loan officer will review your situation and provide the required disclosures.
Are owner occupied hard money loans legal in California?
Yes, when they are made by a properly licensed lender and structured in compliance with federal and California lending law. PB Financial Group is licensed by the California Department of Real Estate and registered with NMLS, and every owner occupied loan is documented according to whether it is a consumer purpose or business purpose loan.
Talk to a California Owner Occupied Hard Money Lender Today
If you own and live in a California property, have equity, and have been told no by a bank, an owner occupied hard money loan may be the solution. PB Financial Group has funded these loans since 2006 and can usually tell you within one conversation whether your scenario fits, which program applies, and what the structure would look like.
Call (877) 700-3703, contact us online, or complete the short form on this page to get started. PB Financial Group serves homeowners in all 58 California counties from our Los Angeles office at 8455 Beverly Blvd #501, Los Angeles, CA 90048.
