Private money loans in IdahoPrivate money is named for who lends it, and the lenders themselves don't agree on who that is.

Private money is lending from outside the banks, commonly on investment property: individuals and small groups lending their own money, and companies and funds that lend on real estate. If you are looking for private money lenders in Idaho, you may be borrowing for a deal, or thinking about lending your own money. This page is written for both.

I don't make private money loans, and ClearPath isn't a lender. What we can do is set your deal beside the other ways to finance it, and work out together which kind of loan fits it and who makes it. Nothing on this page is a term of mine.

Who lends

The market doesn't agree where private money ends and hard money begins

Some sources draw the line by lender: hard money from companies and funds, private money from individuals and small groups lending their own funds. Others say hard money lenders are often individuals themselves. Private money is also described as the wider family, taking in debt funds, family offices and balance-sheet lenders, with hard money inside it, and as the same loans under two names: one used by the trade, one by the public.

I won't settle it here, because the sources do agree on the part that matters more. A hard money loan, whoever makes it, is short, and it is sized and priced on the property more than on the borrower. Private lending can be that, or it can be something else, so the loan in front of you is the thing to read, not its name.

Side by side

Private money beside hard money and a DSCR loan

Where it is hard money. A private loan made the hard-money way is short, commonly interest only, with what you borrowed due at the end. It is priced for speed: a higher rate than a long-term loan, and points paid up front. The national ranges, and how the after-repair value and the cost each limit the loan, are on the page about hard money loans.

Where a DSCR loan differs. A DSCR loan is long-term, pays down over its life and qualifies on the property's rent rather than on your income, and it is commonly priced lower, with fewer points up front. It has limits of its own: a property that isn't ready to rent generally won't qualify, and DSCR loans commonly carry a prepayment penalty, which can erase their lower cost if you sell or refinance soon after.

How they fit together. Investors commonly use a short loan to buy and fix, then refinance into a DSCR loan once the property is rented. Whether your deal wants private money, a DSCR loan, both in turn or something else is something we'll look at together.

Idaho law

Idaho licenses lending on a house, whatever the loan is for

Under Idaho law, and in the Department of Finance's 2020 guidance, lending secured by a one-to-four-family dwelling or by residential real estate in Idaho needs a licence from the Department. Residential real estate, in the law's wording, includes land on which a dwelling is built or intended to be built. The guidance says that whether a loan is commercial in nature is not the deciding factor; the property securing it is.

The law also names exemptions. Among them, in its own words: "Any person not making more than five (5) residential mortgage loans with his own funds for his own investment, in any period of twelve (12) consecutive months", and "An owner of real property who offers credit secured by a contract of sale, mortgage, or deed of trust on the property sold". It lists others as well.

None of this is a judgment of any lender or any loan, and I can't tell you whether a licence applies to what you have in mind. If you are thinking about lending on Idaho property, the Department of Finance is the place to take that question.

Boise

Looking for a private money lender in Boise

I found nothing published on private money terms particular to Boise, and the licensing law above is state law, the same in Boise as anywhere in Idaho. So private money loans in Boise start where they do in the rest of the state, and terms differ from lender to lender. These are worth asking any of them: what the loan is sized against, and whether value or cost sets the limit; how long it runs, and whether the whole amount comes due at the end; what is charged up front, and what an extension costs if the work runs over; and which way out they are assuming, and whether it matches yours.