How much does a hard money loan cost in Massachusetts in 2026?

The cost checklist for a Massachusetts project

Request the same information for each proposal so you can compare like for like. Confirm which charges are already included in a quoted fee total and which are separate.

Cost or cash item	What to confirm in writing
Interest	Annual rate, payment schedule, day-count method and whether interest uses the full commitment, funded balance or another defined basis.
Points	Percentage, dollar amount, calculation base and when paid. One point means one percent of the stated base. Do not assume an origination charge buys down the interest rate.
Lender and third-party fees	Itemized processing, valuation, legal, title, recording and other applicable charges, including who collects each fee and when it is due.
Draws	Inspection or request charges, minimum draw size, retained amounts and the cash you must advance before reimbursement.
Prepayment and extension	Minimum interest, exit or prepayment charges if any, maturity date, extension conditions and charges. An extension is not automatic.
Reserves and escrows	Amounts withheld or deposited at closing, what they pay, and how remaining funds are released or credited. Separate cash withheld from a fee that is earned.

A worked example with explicit assumptions

This hypothetical project has a $450,000 purchase price, $150,000 renovation budget and $750,000 after-repair value. To illustrate a leverage check, assume a purchase-plus-rehab limit of 85% of purchase plus the renovation budget, and a separate cap of 70% of after-repair value.

• Purchase-plus-rehab calculation: $450,000 x 85% + $150,000 = $532,500.
• After-repair-value cap: $750,000 x 70% = $525,000.
• The lower of these two example limits is $525,000, not $500,000. Other underwriting constraints could reduce it further.

For the cost comparison below, we deliberately choose a $500,000 commitment below that illustrative cap. Assume $350,000 is advanced toward the purchase and $150,000 is held for renovation draws. These percentages and amounts are example inputs, not advertised program limits or a promise of proceeds.

Upfront cash is different from financing cost

Illustrative purchase-closing item	Amount
Purchase price	$450,000
Purchase advance	$350,000
Borrower purchase contribution	$100,000
Origination points, assumed 2% of the commitment	$10,000
Other fees, assumed for this example	$5,000
Illustrative cash subtotal	$115,000

The $150,000 renovation holdback is part of the commitment, not additional purchase cash. This subtotal assumes points and fees are paid separately rather than deducted from the purchase advance. It excludes deposits already paid or credited, prorations, prepaid interest, reserves, escrows and other closing adjustments. It also excludes the working capital needed before draws arrive. Reconcile the actual closing statement instead of treating $115,000 as a required amount for your file.

Compare the same loan over two holding periods

Assume an 11% annual simple interest rate charged on the full $500,000 commitment throughout, no principal reduction, a month-based calculation using months / 12, $10,000 in origination points and $5,000 in other fees. Assume no minimum-interest, prepayment, draw, extension or other charges in this simplified comparison. Actual documents may use a different interest basis and day count.

Financing cost	8 months	12 months
Interest	$36,666.67	$55,000.00
Origination points	$10,000.00	$10,000.00
Other assumed fees	$5,000.00	$5,000.00
Illustrative financing-cost subtotal	$51,666.67	$70,000.00

Interest in this example equals $500,000 x 11% x months / 12. The difference between the two subtotals is $18,333.33. Repayment of the $500,000 principal is not another interest or fee expense, although it must be funded at payoff. Neither subtotal is the project's total cost or profit calculation: renovation spending, taxes, insurance, utilities, selling or refinance costs and other operating expenses still matter.

Avoid double counting and surprise cash gaps

• Do not count an interest reserve twice. Track the actual interest expense and how it is paid. A reserve used to pay that same interest is a funding mechanism, not automatically a second interest charge. Review any separate reserve-related charge on its own.
• Match the interest basis. If a proposal charges on funded balances, use the expected draw dates and balances. Do not reuse the full-commitment interest calculation above without changing that assumption.
• Stress-test a slower exit. Add the extra interest, carrying expenses and any applicable extension charges, and confirm what happens if an extension is not approved.
• Separate funds available now from funds released later. Use the draw-planning guide to identify work you must fund before reimbursement.

From this example to your own property

Explore Massachusetts and New England bridge and fix-and-flip financing and our completed Boston bridge financing example. A completed transaction does not establish the terms for another project. Start with the property, purchase price, budget, requested amount and exit plan; use the updated document checklist when your point of contact identifies the records needed for review.

Get priced on this loan type

Leave your email and the 316 desk sends the five things it takes to get a term sheet within one business day. No cost, no credit pull, no list.

Send it

Common questions

How do I compare two hard money loan quotes?

Use the same loan amount, expected holding period, draw assumptions and exit date. Compare interest, points, itemized fees, minimum-interest or prepayment terms, draw charges and extension conditions. Also compare the cash actually available at closing, not just the total commitment.

What does two points mean on a $500,000 loan?

If the agreed calculation base is $500,000, two points is 2% of that amount, or $10,000. Confirm the base, dollar charge, purpose and payment timing in the proposal. An origination charge does not automatically mean a discounted interest rate.

Is the renovation holdback available for the purchase?

Do not assume so. Check the proceeds schedule for the purchase advance, renovation holdback, reserves, deductions and any authorized initial advance. Funds held for later draws are not the same as cash available to close the purchase.

Will selling early always reduce my interest cost?

It can reduce time-based interest, but the loan's minimum-interest, prepayment or exit terms may affect the savings. Request a payoff calculation for the intended date rather than assuming the simple month-based example applies.

Do I pay interest on undrawn renovation funds?

Check the written interest basis. Confirm whether interest uses the full commitment, funds actually outstanding or another defined amount. For funded-balance interest, the timing of renovation draws matters to the calculation.

Related guides

316 Capital is a private lending and capital advisory firm. We arrange business-purpose real estate financing through institutional capital partners; loans are not available for owner-occupied primary residences. All amounts, rates and leverage percentages in the worked example are hypothetical assumptions, not current market ranges, a quote or a commitment. Every quote is transaction-specific and subject to underwriting. Contact [email protected] or +1 (617) 546-4817.