There are several hard money lenders that have recently started promoting zero down loans for investors and maybe others that selectively offer this type of loan. A promise of zero down payment begs the question, are these for real or too good to be true? Without even investigating the specific offers we know that a zero down loan is riskier for the lender. If a down payment isn’t required, you can be assured that the lender will have other means of reducing their risk. For example, they may charge a much higher interest rate or ask for additional collateral.
So what are these lenders really offering when they promote zero down? I reviewed two loan programs to answer this question. The two lenders are Hard Money Sources and Do Hard Money. Both have been actively promoting zero down loan programs.