Looking for HML or Private Lender to help close house hack

Lender · Florida Based (48 states Puerto Rico) · Member since 2017 · 321 posts · 121 votes

1y

@Isaac Passmore,

This is a tough situation—but not an impossible one.

The real issue here isn’t just the appraisal or the illegal stove. The deeper problem is regulatory: hard money lenders legally cannot fund loans on owner-occupied primary residences due to federal consumer protection laws. That includes Truth in Lending, Dodd-Frank, and the Ability-to-Repay Rule. But also they don’t want to because it puts them at extremely high risk because it’s very difficult to close the property when it’s someone’s primary residence. Because the courts dragged out the foreclosure process for several years. The investor loses a lot of money if the borrower stops paying.

So unless the buyer has another place to live in Maryland and can classify the property as an investment, hard money is a no-go. The seller’s refusal to remove the stove further blocks traditional financing until that violation is fixed.

That said—there are still several viable options, especially if you get creative and move fast:

Option 1: Lease with Option to Buy (Fastest + Easiest)

- Sign a 6- to 12-month lease agreement with the seller.

- Pay an option fee (3–5%) that applies to the future purchase.

- Use the lease term to remove the stove, resolve zoning, and secure a traditional loan (FHA or conventional).

- Close using standard owner-occupied financing once the property qualifies.

Why it works:

- Avoids appraisal headaches now.
- Gets you into the property fast.
- Gives you full legal occupancy to fix the issue.
- Seller gets monthly rent + security via the option agreement.

Option 2: Claim Investment Status Using Alternate Maryland Address

If you can’t go the primary route:

- Use a friend or family member’s Maryland address as your legal residence.

- Sign an affidavit of non-owner occupancy at closing.

- Close using a business-purpose loan (via an LLC or personal name).

- Lease the subject property to yourself or another tenant.

- Refinance into a primary residence loan later.

Note: This works if the intent is truly to treat the property as a business/investment. Be consistent across documents—no mixed signals.

Option 3: FHA 203(k) or Fannie Mae Homestyle Renovation Loan

If there’s enough time and you want to go fully conventional:

- These programs allow you to finance both the purchase and renovations.

- Work with an approved contractor to remove the stove and make any other fixes.

- FHA allows as little as 3.5% down; Homestyle requires 5%.

Downside: You need 30–60 days, lender familiarity, and a clear contractor plan. Probably not fast enough for your April 30th closing unless already started.

Option 4: Have a Partner’s LLC Close, Then Lease and Refinance

- Bring in a trusted partner who already owns property in Maryland.

- They buy the property using their LLC and business-purpose financing.

- You lease the property from them, fix the issue, then refinance it into your name once eligible.

Good for: Quick close, avoids occupancy complications, protects the deal and opens doors later.

Bottom Line

If time is tight and you want to retain primary occupancy status without fraud or gray areas, the Lease with Option to Buy is your best play. It’s legal, simple, and gives you control without lender entanglements upfront.

Let me know if you you need any help with a local attorney to draw up a lease-option contract, or a conference call or letter with the seller to explain the approach, or even just a quick legal checklist to stay clean.

Good luck!
Jim

954-993-1625

Stairway Mortgage, a Division of NEXA Mortgage LLC597 Reviews

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Russell BrazilBusiness Member

Moderator

Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

1y

Quote from @Isaac Passmore:

Situation:

I am currently under contract for a great deal on a property in Prince George's county Maryland and quickly coming up on the closing date. However, the deal went sideways and I am in need of creative financing. Basically, the seller wishes to back out of the deal due to price reasons and will not let my traditional lender get an appraisal. Furthermore, this same house was appraised by the same appraisal company last year and noted that there was an illegal stove and microwave inside the ADU on the property. This likely prevented the sale last summer and because that stove still exists in the ADU today would prevent sales through traditional financing. I have confirmed this with my lender and they would not be able to lend due to failing the appraisal. There is also no way that the seller would remove the stove as they no longer wish to sell to us due to pricing...

To make this deal work my wife and I are planning to house hack the property and leverage primary residency to obtain more favorable long term financing and support a long term rental.

I spoke with a hard money lender today and was told that most commercial hard money lenders that work with flippers would be unable to support financing a personal residence purchase because regulations are different.

Looking for:

We're looking for a hard money lender or private lender that can help us finance a personal residence purchase for a house hack that closes on April 30th. My wife and I were prepared and approved to put 30% down and had a budget set aside for all our repairs. We just need someone to help us get into the deal so we can remove the stove and microwave ourselves and refinance this into a traditional loan.

All you have to do is move the stove to another room. Your agent should have easily been able to navigate this non-issue

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Lauri Carl

Member since 2025 · 2 posts · 0 votes

1y

Hi Isaac! Let me help, sent you a connect.

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Kyle DeutschmannPro Member

Investor · Washington, DC · Member since 2017 · 428 posts · 205 votes

1y

Quote from @Isaac Passmore:

Situation:

I am currently under contract for a great deal on a property in Prince George's county Maryland and quickly coming up on the closing date. However, the deal went sideways and I am in need of creative financing. Basically, the seller wishes to back out of the deal due to price reasons and will not let my traditional lender get an appraisal. Furthermore, this same house was appraised by the same appraisal company last year and noted that there was an illegal stove and microwave inside the ADU on the property. This likely prevented the sale last summer and because that stove still exists in the ADU today would prevent sales through traditional financing. I have confirmed this with my lender and they would not be able to lend due to failing the appraisal. There is also no way that the seller would remove the stove as they no longer wish to sell to us due to pricing...

To make this deal work my wife and I are planning to house hack the property and leverage primary residency to obtain more favorable long term financing and support a long term rental.

I spoke with a hard money lender today and was told that most commercial hard money lenders that work with flippers would be unable to support financing a personal residence purchase because regulations are different.

Looking for:

We're looking for a hard money lender or private lender that can help us finance a personal residence purchase for a house hack that closes on April 30th. My wife and I were prepared and approved to put 30% down and had a budget set aside for all our repairs. We just need someone to help us get into the deal so we can remove the stove and microwave ourselves and refinance this into a traditional loan.

As others have mentioned, you cannot get a hard money loan on a primary residence. Your best bet would be a conventional renovation loan or 203k loan.

If you decide to purchase this as a rental property instead, I'm happy to chat and see if we can help! We do not require an appraisal on our fix and flip/BRRR financing.

[email protected]

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Ko KashiwagiPro Member

Lender · Los Angeles, CA · Member since 2022 · 967 posts · 445 votes

1y

Hi Isaac,

Are you moving into the house during the rehab/renovation? Some lenders will lend on it as long as you don't occupy the property at all during term of the loan

310-848-9776

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Isaac Passmore
OP
Member since 2019 · 30 posts · 8 votes
1y
Quote from @Ko Kashiwagi:

Hi Isaac,
Are you moving into the house during the rehab/renovation? Some lenders will lend on it as long as you don't occupy the property at all during term of the loan

I believe I have found a lender to help me with this specific situation. But my situation allows me to be flexible. Ideally, I would move in and begin the house hacking process, however, I can continue to occupy my current residence while I perform the necessary repairs from a far.
1 Reply
Erik EstradaBusiness Member
Lender · Member since 2022 · 6k+ posts · 1k+ votes
1y
Quote from @Isaac Passmore:

Quote from @Ko Kashiwagi:

Hi Isaac,
Are you moving into the house during the rehab/renovation? Some lenders will lend on it as long as you don't occupy the property at all during term of the loan

I believe I have found a lender to help me with this specific situation. But my situation allows me to be flexible. Ideally, I would move in and begin the house hacking process, however, I can continue to occupy my current residence while I perform the necessary repairs from a far.

Hey Isaac,
Generally most Hard Money lenders will not lend on a property you are going to occupy as your primary residence. There are far too many consumer protections for them to even consider a loan knowing that your plan is to live in the property.
However, if your goal is to buy this property with a hard money loan and not live in it and maintain your current primary residence, you should be able to locate a hard money lender that can close this for you. But it seems like the seller is getting cold feet?
[email protected]818-269-7983
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Isaac Passmore
OP
Member since 2019 · 30 posts · 8 votes
1y
Quote from @Erik Estrada:

Quote from @Isaac Passmore:

Quote from @Ko Kashiwagi:

Hi Isaac,
Are you moving into the house during the rehab/renovation? Some lenders will lend on it as long as you don't occupy the property at all during term of the loan

I believe I have found a lender to help me with this specific situation. But my situation allows me to be flexible. Ideally, I would move in and begin the house hacking process, however, I can continue to occupy my current residence while I perform the necessary repairs from a far.

Hey Isaac,
Generally most Hard Money lenders will not lend on a property you are going to occupy as your primary residence. There are far too many consumer protections for them to even consider a loan knowing that your plan is to live in the property.
However, if your goal is to buy this property with a hard money loan and not live in it and maintain your current primary residence, you should be able to locate a hard money lender that can close this for you. But it seems like the seller is getting cold feet?

That is exactly what we ended up finding ourselves and the solution we are aiming for. The seller is no longer happy with the purchase price and wishes to backout or renegotiate. They definitely want to sell the property
0 Reply

Doug Coldren

Lender · OH · Member since 2025 · 24 posts · 2 votes

1y

Hi, Isaac! I would love to help.

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Looking for HML or Private Lender to help close house hack

Looking for HML or Private Lender to help close house hack

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