Where to find a private lender for a primary residence?

Beaumont, Texas
Creative Real Estate Financing
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Where to find a private lender for a primary residence?

Katryna Wood
Member since 2025 · 6 posts · 2 votes

Hi all! I am struggling to find someone to fund a primary residence. It would be for $120k plus closing costs for a year or two until we could refinance. I have been told to check this website, but I haven't found anything yet. 

I have looked into hard money loans but they are all for investors. I just want to find anything that is no or low down payment. The loan would be secured by the property. I don't even mind paying ridiculous interest rates as I understand this is a big ask. I just don't know where to find a private lender as anything I have googled looks to be for businesses or a scam. 

Please, anyone, point me in the right direction. Thanks! 

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Jay HurstBusiness Member
Lender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
1y
Quote from @Katryna Wood:

Thanks! It does help. 

My husbands aunt is selling it to us at a discount but is unable to do any sort of financing as she needs to sell it and get the funds. It is in livable condition but needs cosmetic repairs.

We are currently paying $1600 on a $220k mortgage and we want to sell and move to this home, but we would only net about $7-10k on the sale of our home. 

The only reason we don't qualify for traditional lending is because I took some time off to help my terminally ill father, and my husband has been in a commission-based role for less than a year (the lender said you need 2 years of history for that). This is why we are seeking a private lender as we would refinance after 1-2 years once we have proof of steady job history.


 The reason it is harder to get a mortgage on a primary home vs investment property is a federal law called "ability to repay" or ATR.  A lender is required to establish the ATR of a borrower when it will be their primary residence. This came out of the fall out of the subprime era and eventually crash. A lot of those loans were made to people who never had a chance to actually pay back the loan and that resulted in a lot of people losing their homes. If you are buying an investment property, it is a business, and if you by something you cannot afford the thought is that is on you. 

The ATR does not have to be the same on every deal. There are many ways to look at it.  You mentioned you took time off, but are you back at a W-2 job yet? 

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  • Taylor DaschBusiness Member
    Real Estate Agent · Temple, TX · Member since 2022 · 1k+ posts · 700 votes
    1y

    Private Money Lenders are going to be hard for a primary residence as it is an investment and typically they want to see a return prior to two years - also, the house would need to be purchased at a discount which would limit your options on a primary residence - now if you are looking for something that needs some work that you are planning on fixing up, it would be a little more feasible. For your situation, it sounds like a seller financing purchase could be a good fit as well but this would also have limited options and the terms wouldnt likely be great. Hope this helps! Good luck. 

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  • Katryna Wood
    OP
    Member since 2025 · 6 posts · 2 votes
    1y

    Thanks! It does help. 

    My husbands aunt is selling it to us at a discount but is unable to do any sort of financing as she needs to sell it and get the funds. It is in livable condition but needs cosmetic repairs.

    We are currently paying $1600 on a $220k mortgage and we want to sell and move to this home, but we would only net about $7-10k on the sale of our home. 

    The only reason we don't qualify for traditional lending is because I took some time off to help my terminally ill father, and my husband has been in a commission-based role for less than a year (the lender said you need 2 years of history for that). This is why we are seeking a private lender as we would refinance after 1-2 years once we have proof of steady job history.

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  • Mike GrudzienPro Member
    Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
    1y

    See if you can find a local credit union that is willing to work with you.  Local relationships help and credit unions tend to be helpful.

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  • Jay HurstBusiness Member
    Lender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
    1y
    Quote from @Katryna Wood:

    Thanks! It does help. 

    My husbands aunt is selling it to us at a discount but is unable to do any sort of financing as she needs to sell it and get the funds. It is in livable condition but needs cosmetic repairs.

    We are currently paying $1600 on a $220k mortgage and we want to sell and move to this home, but we would only net about $7-10k on the sale of our home. 

    The only reason we don't qualify for traditional lending is because I took some time off to help my terminally ill father, and my husband has been in a commission-based role for less than a year (the lender said you need 2 years of history for that). This is why we are seeking a private lender as we would refinance after 1-2 years once we have proof of steady job history.


     The reason it is harder to get a mortgage on a primary home vs investment property is a federal law called "ability to repay" or ATR.  A lender is required to establish the ATR of a borrower when it will be their primary residence. This came out of the fall out of the subprime era and eventually crash. A lot of those loans were made to people who never had a chance to actually pay back the loan and that resulted in a lot of people losing their homes. If you are buying an investment property, it is a business, and if you by something you cannot afford the thought is that is on you. 

    The ATR does not have to be the same on every deal. There are many ways to look at it.  You mentioned you took time off, but are you back at a W-2 job yet? 

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  • Katryna Wood
    OP
    Member since 2025 · 6 posts · 2 votes
    1y

    Thank you @Jay Hurst! I didn't know this. I am not back at a w-2 yet. I quit my w-2 in 2023 and pursued real estate full-time. Then, in April last year, my husband and I started a business, and I temporarily put both of those on hold while taking care of my dad. My husband left his job to help me in the business this past year and went to work at a dealership as a salesman when my dads health started declining. 

    Then my husbands aunt offered to sell us her place for this cheap, and I wanted to hop on it if at all possible so thats why I am here trying to figure this out lol

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  • Steve K.
    Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
    1y

    Do you have anyone that could co-sign for you? 

    0Reply
  • Ko KashiwagiPro Member
    Lender · Los Angeles, CA · Member since 2022 · 967 posts · 445 votes
    1y

    Are you able to secure the house through a lease option so you can purchase in a few years when you are ready? This sounds a lot easier than trying to buy with no money down with private money, especially for owner occupied residency

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  • Katryna Wood
    OP
    Member since 2025 · 6 posts · 2 votes
    1y

    I tried this but they aren’t able to do that unfortunately 

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y
    Quote from @Katryna Wood:

    Hi all! I am struggling to find someone to fund a primary residence. It would be for $120k plus closing costs for a year or two until we could refinance. I have been told to check this website, but I haven't found anything yet. 

    I have looked into hard money loans but they are all for investors. I just want to find anything that is no or low down payment. The loan would be secured by the property. I don't even mind paying ridiculous interest rates as I understand this is a big ask. I just don't know where to find a private lender as anything I have googled looks to be for businesses or a scam. 

    Please, anyone, point me in the right direction. Thanks! 


     Another option would be to find someone to buy it and do a lease option contract with you. So an investor buys the property, you pay them a down payment for the lease option then pay rent for a year and after a year you have option to buy it.

    What makes this challenging is the lease option payment would probably need to be around 20% of the purchase price but it sounds likeyou do not have it. maybe moving is just not in the cards.

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  • Shiloh LundahlPro Member
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    1y

    I'm offended that nobody included me in in this conversation.@Chris Seveney's suggestion could be a really good solution depending on the numbers. 

    Also, depending on when you purchase the home that you currently within, and the interest rate that currently has, it may be wise to not sell it, but to rent it out.

    - How much is your aunt willing to sell her house to you for?
    - How much would you say the house is realistically worth?
    - What are the rents in the area of the house?

    - What needs to be fixed in the house?

    - How long before you think you would be able to get your own loan and purchase the property in your names?

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  • Katryna Wood
    OP
    Member since 2025 · 6 posts · 2 votes
    1y
    Quote from @Shiloh Lundahl:

    Also, depending on when you purchase the home that you currently within, and the interest rate that currently has, it may be wise to not sell it, but to rent it out.

    - How much is your aunt willing to sell her house to you for?
    - How much would you say the house is realistically worth?
    - What are the rents in the area of the house?

    - What needs to be fixed in the house?

    - How long before you think you would be able to get your own loan and purchase the property in your names?


     She is willing to sell the home to us for $120k.

    An appraisal needs to be done because it’s hard with few comps in that area. Trulia and Zillow value it at $240k. Realistically I’m thinking $150k+.

    I considered renting our home out but our mortgage is almost $1600 and I don’t think we’d be able to rent it out for more than $1700.

    The home is foundationally sound and just needs cosmetic repairs. As in it’s just outdated and needs a stair rail. It’s perfectly livable!

    I believe it would take 2 years tops. 

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  • Scott JohnsonBusiness Member
    Specialist · Greenville, NC · Member since 2019 · 673 posts · 408 votes
    1y

    I like @Chris Seveney and @Shiloh Lundahl's concept for a fast sale that you can do a lease option on. Very creative, but solid.

    This also may offer the potential for you to keep your other home and rent it out as an asset, but that's between you and the investor who buys your aunts home to subsequently rent it back to you. 

    If your aunt isn't in a big rush, another option may be (I'm not familiar with TX law):

    - Pay your aunt for a Right of First Refusal (means you get a chance to buy it before anyone, but has to be notarized by you and your aunt and filed at the courthouse)

    - Sell your house on or off market. Whichever allows you enough funds to complete the purchase on her house. Listing on the Open Market normally gets you a higher price.

    - Get pre-qualified with a credit union/traditional lender while your home is for sale citing the money you'll get from the sale of your current home as a down payment

    - Complete the sale your home and purchase of your aunts home in the same day.

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  • Shiloh LundahlPro Member
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    1y

    @Katryna Wood I didn't realize that you were in Texas. Texas has additional laws against these options. There is another route you can take though, but I'm not very familiar with it. I know that there's some other people on this website that may be more familiar with it though.

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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    1y

    Why not just save for the downpayment and work on increasing income to qualify for a traditional loan? You are better off just leasing until you can afford to purchase a primary home. 

    Hard Money loans on primary residences do exist, but not in the traditional sense. Most investors will do a 2nd on their primary and use the funds to purchase an investment property or rehab an existing investment property. The key is that the funds need to be used for business purpose. Most Hard Money lenders may also require you to have the investment property under contract, in order for them to feel confident you won't try to sue them and you can pay them off either by selling or refinancing the property you are using the cash out proceeds for. It will also be at a very low CLTV. 50-55% CLTV Max.

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  • Stanley Yeldell
    Member since 2025 · 116 posts · 52 votes
    1y

    Katryna, finding a private lender for a primary residence can be tricky since most private lenders and hard money lenders focus on investment properties. However, here are a few strategies to explore:

    1. Local Real Estate Investor Networks – Join local REI groups, meetups, or Facebook groups where private lenders may be open to funding primary residences under the right terms.

    2. Seller Financing – If the seller is open to it, you could negotiate a seller-financed deal where they act as the lender.

    3. Community Banks & Credit Unions – Smaller local banks may offer portfolio loans with flexible terms.

    4. Wealthy Individuals / Family Offices – High-net-worth individuals sometimes fund private deals, especially if they see strong equity and repayment potential.

    5. IRA or Self-Directed Retirement Accounts – Some investors lend money from their self-directed IRAs for real estate transactions.

    Since you’re willing to pay higher interest for a short-term solution, a contract for deed (land contract) might also be an option, where the seller keeps the title until you pay it off or refinance.

    Would you like me to connect you with any potential private lenders?

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  • Shafi Noss
    Lender · Nationwide · Member since 2018 · 571 posts · 310 votes
    1y

    @Katryna Wood Hi Katrina, I may be able to set this up for you. It requires special licensing but can be done in Texas, Georgia and a few other states. 

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