why would a hard money lender not make this loan? 65% 1st Mortgage from lender seller second for 35%?
If in fact the lender wants to make sure the house has enough equity in case they have to foreclose, they have more than enough equity to give them that comfort. When you consider that the buyer has good credit, why would the hard money lender not make that loan? The only argument I can somewhat give credence to is that the buyer has not put any of his own money into the deal, and is more likely to walk away if something goes wrong. But I would argue that the lender in this case is more protected than in a typical 5% down conventional house purchase loan where the borrower puts 5% down even when you factor in PMI.