How do I get out of a hard money loan on a US property?

The standard exit is a refinance into long-term institutional financing: a DSCR program if the property earns rent, or a foreign national program using Canadian documentation. Start about 90 days before the balloon date; options narrow sharply after it. Appraised value, rent coverage and title status decide most files. No approval is guaranteed.

When is selling better than refinancing out of hard money?

When the property cannot appraise near the needed value, when rent cannot cover a long-term payment, or when the balloon is too close for any refinance to close in time. An honest exit review prices the sale option alongside the refinance instead of forcing a loan.

Hard Money and Private Mortgage Exit Plans

The direct answer: Hard money is a bridge, and the exit is a refinance into long-term institutional financing: DSCR if the property earns rent, foreign national full-doc if it does not. The single most important variable is the calendar. Start roughly 90 days before the balloon; a planned exit is cheap and a forced one never is.

Why this file is complex

These loans were built for speed, not tenure: double-digit carry, interest-only structure, a balloon that arrives faster than expected. Borrowers often entered under deadline pressure, so the file was never structured for its own exit. Meanwhile the carrying cost eats the equity that the exit depends on.

What David checks

The balloon date, any extension rights, and their cost
Current appraised value versus the payoff figure
Rent: actual or market, and whether it covers a long-term payment
Title status and whether an LLC transfer happened along the way
Seasoning: how long owned, and what that opens or closes
Prepayment penalties on the exit itself

What documents or facts change the answer

Strong rent coverage makes a DSCR exit nearly mechanical. A higher appraisal than purchase widens every option. Six or twelve months of ownership seasoning changes which programs price the file on value rather than cost. Documented renovations can move the appraisal materially.

When a different path may exist

If rent cannot carry the payment but Canadian income documents well, the foreign national full-doc route replaces the DSCR test. If the balloon is too close, a short extension negotiated early can buy the weeks a proper refinance needs, at a price worth comparing honestly.

When waiting or not proceeding may be safer

Waiting is rarely the friend of a balloon, but forcing a bad refinance is worse: if value or rent cannot support long-term financing, selling while equity remains is the disciplined exit. That comparison belongs in the review, in numbers.

Ask David to Review the Scenario

Send the scenario, not sensitive documents: what happened, the property, the income type, the timeline. Straight answer within a business day, including an honest none of this fits yet when that is the truth.

Send David the Scenario

Or book directly: nataf.ca/rv · 1-888-640-6592

No approval is guaranteed. Mortgage availability, rate, terms, and conditions depend on lender underwriting, borrower profile, documentation, property type, jurisdiction, and timing. David Nataf, Mortgage Loan Originator, NMLS 2613311. Licensing context: Orbis Mortgage (NMLS 2583431, USA); Groupe Hypothécaire Orbis (AMF 3001986744, Québec).