Verifiable facts about California private lending, each with its source, plus the most common hard money myths corrected. Cite freely with attribution to the listed source. This page is educational information, not legal or financial advice.
California has 58 counties and roughly 39 million residents — the largest state population in the U.S.
Source: U.S. Census Bureau
California's usury limit generally does not apply to loans made or arranged by a licensed California real estate broker and secured by real property. This exemption is why hard money loans can price at market rates. (Simplified summary of the law, not legal advice.)
Source: California Constitution, Article XV, Section 1
Regulation Z generally exempts credit primarily for business, commercial, or agricultural purposes. The creditor must determine the primary purpose in each case; a property used partly by its owner may require different analysis. This exemption does not eliminate underwriting or other applicable laws.
Source: Regulation Z, 12 CFR 1026.3(a)
California nonjudicial foreclosure involves notice-of-default and notice-of-sale requirements. Additional borrower protections, pre-notice requirements, postponements, and case-specific rules can affect timing. Do not calculate a deadline from a general website summary; consult a California attorney and the actual notices promptly.
Source: California Attorney General: homeowner rights and foreclosure assistance
A deed of trust with a power-of-sale clause can permit a nonjudicial foreclosure in California, subject to statutory procedures. Do not assume every loan uses the same instrument or that judicial remedies are unavailable.
Source: California Civil Code Section 2924
Proposition 13 generally limits the base property-tax rate to 1% plus voter-approved bonded indebtedness. Annual increases in base-year value are generally limited to 2%, but changes in ownership and new construction can trigger reassessment. Other assessments or charges may also appear on a tax bill.
Source: California Board of Equalization, California Property Tax: An Overview, Publication 29
Lending on California real estate generally requires a license — most commonly a Department of Real Estate broker license or a Department of Financial Protection and Innovation lender license.
Source: California DRE / DFPI (California Financing Law)
Website rate-map figures are indicative planning examples, not a live rate feed or a binding quote. Request current rates, points, leverage, term length, and total costs for the specific property and loan program.
Source: Website illustration notice — confirm current terms with a loan officer
Advertised closing timelines are targets, not guaranteed deadlines or independently audited averages. Property review, title, valuation, borrower documentation, and program requirements can delay funding.
Source: Website timing notice — request a file-specific timeline
False. Most hard money borrowers are experienced investors who choose speed and simplicity over bank pricing. When a good property must close in a week, a 30-60 day bank process means losing the deal — the loan cost is simply a cost of doing business.
False. Lenders make money on interest and points, not foreclosures. A foreclosure in California takes months, costs legal fees, and ties up capital. Every legitimate lender underwrites for a loan that gets repaid.
False. California hard money rates (roughly 8.5%-12%) reflect short terms, fast closings, and asset-based risk — and they are legal at market rates because broker-arranged real estate loans are exempt from California's usury cap. On a 6-month flip, the difference versus a bank loan is usually a small fraction of the project profit.
False. Owner-occupied hard money loans exist — they simply follow different rules. Business-purpose loans secured by a primary residence and consumer-purpose owner-occupied loans each have their own requirements, and Fidelity Funding offers both, including owner-occupied 2nd mortgages.
False. We verify the property's value, title, your equity or down payment, and your exit plan. What we skip is the paperwork that doesn't predict repayment on an asset-based loan — tax returns, W-2s, and debt-to-income ratios.
False. Brokers re-sell your file and add fees; direct lenders fund with their own capital and control the approval. Ask any lender two questions: 'Are you funding with your own capital?' and 'Can I see every fee on a written term sheet?'
Fidelity Funding Corp · Direct California private money lender since 2006
450 N Brand Blvd, 6th Floor · Glendale, CA 91203 · Mon-Fri 8AM-6PM PT