What is a "hard money loan" primarily used for?

A hard money loan is primarily used for short-term financing secured by real estate. This type of loan is typically issued by private lenders or companies rather than conventional banks. The primary characteristics of hard money loans are that they are based primarily on the value of the property being used as collateral rather than the borrower's creditworthiness. This makes hard money loans a popular choice for real estate investors, property flippers, or buyers who need quick access to cash and may not qualify for traditional financing due to time constraints or poor credit history.

These loans often come with higher interest rates and shorter repayment periods, usually ranging from a few months to a few years. They can be an efficient means for individuals seeking to purchase, renovate, or refinance real estate quickly, but they are not suitable for long-term financing solutions due to their costs and terms.

In contrast to this, the other options mention types of loans that serve different purposes, such as long-term financing or government programs for first-time buyers, which do not align with the defining features and intended use of hard money loans.