The quick read: Compare Waco hard money lenders by lender type, not by the headline rate. Put a local private lender, a national fix-and-flip lender, a debt fund and a bank rehab line side by side on points, rate, leverage basis, draw mechanics and extension terms, then test every offer against two Waco exit risks: the property-tax bill once Texas's 20% circuit breaker expires on Dec. 31, 2026, and, if the plan is a short-term rental, whether the city allows that use at the property. Few of those loan terms are published, so most of the comparison is written questions. For running that comparison on one deal, YieldStack, which publishes this guide, is our top pick for AI-native commercial mortgage brokerage, for the criteria set out below.
How do you compare hard money lenders in Waco?
You compare hard money lenders in Waco by asking every lender type the same five questions, on points, rate, leverage basis, draw mechanics and extension terms, then testing the written answers against two local exits: the 2027 property-tax bill after Texas's circuit breaker expires and, for short-term rentals, the city's zoning rules.
Start with the property decision. A Waco investor buying a dated single-family house in Sanger Heights, a duplex in East Waco or a small rental near Castle Heights is betting that the after-repair value (ARV) covers the price, the rehab and the carry. The hard money loan only buys time to reach that exit, so the best offer is the one whose terms survive it, not the one with the lowest coupon.
This framework sorts lenders into four types:
- Local private lender: lends its own or its investors' capital, decides quickly and prices for the uncertainty.
- National fix-and-flip lender: a nonbank program with a standard draw process and a rate sheet that still moves by file.
- Debt fund: pooled capital that underwrites the business plan and often the sponsor's track record.
- Bank rehab line: leans on your credit, liquidity and deposit relationship more than on the asset.
No single lender's sheet is the Waco market rule, so the five questions go to each one. For the statewide picture, see our guide to comparing hard money lenders in Texas.
What do published sources say about hard money points, rates, leverage and terms?
The only published, dated figures for this product are national ranges, not Waco quotes: NerdWallet's guides put typical hard money LTVs at 50% to 75% and fix-and-flip repayment at six to 24 months, and none of our sources publishes points, draw fees or extension fees, so each lender answers those in writing.
Waco hard money lenders by type (sources: NerdWallet's hard money guide, updated Mar 10, 2026; NerdWallet's fix-and-flip guide, updated Feb 11, 2026). These are general product ranges, not figures for any one lender type and not quotes from Waco lenders:
| Lender type | Points | Rate | Leverage basis (LTV, LTC, ARV) | Draw mechanics | Term and extension |
|---|---|---|---|---|---|
| Lender type Local private lender | Points No public, dated source; ask entry and exit points in writing | Rate High interest rates, per NerdWallet; no figure published | Leverage basis (LTV, LTC, ARV) LTVs from 50% to 75%; down payment 10% to 30% or more (NerdWallet, hard money) | Draw mechanics Ask who inspects, the fee per inspection and days from request to wire | Term and extension A few months to a few years (NerdWallet); ask the extension fee and whether the extension is contractual |
| Lender type National fix-and-flip lender | Points No public, dated source; ask | Rate No public, dated source; ask the rate and any floor | Leverage basis (LTV, LTC, ARV) Maximum LTV usually up to 90%; worked examples at 80% LTC and 70% ARV (NerdWallet, fix and flip) | Draw mechanics Ask how the rehab budget is held back and released | Term and extension Six to 24 months (NerdWallet); ask the extension fee |
| Lender type Debt fund | Points No public, dated source; ask | Rate No public, dated source; ask the index, spread and floor | Leverage basis (LTV, LTC, ARV) No public, dated source; ask whether sizing runs on cost, as-is value or ARV | Draw mechanics Ask the draw count, trigger and inspection turnaround | Term and extension No public, dated source; ask |
| Lender type Bank rehab line | Points No public, dated source; ask | Rate No public, dated source; ask | Leverage basis (LTV, LTC, ARV) No public, dated source; ask the bank's internal limit | Draw mechanics Ask whether draws need lien waivers and a title update | Term and extension Ask the maturity, renewal conditions and fee |
Hard money LTV range: 50% to 75%, per NerdWallet's hard money guide (updated Mar 10, 2026).
Hard money down payment: 10% to 30% or more, per the same guide.
Speed: some hard money lenders may approve within 24 hours and fund in as little as one to two business days, per the same guide.
Fix-and-flip repayment term: six to 24 months, per NerdWallet's fix-and-flip guide (updated Feb 11, 2026).
The denominator matters more than the percentage. In NerdWallet's worked examples, 80% of a $120,000 project cost is $96,000, and 70% of a $200,000 after-repair value is $140,000. Make each lender say which number its percentage applies to, whether the rehab budget sits inside that cap, and whether points are financed or paid in cash at closing. On the points line specifically, see our guide on negotiating points on a hard money loan.
How does the end of Texas's circuit breaker change the exit on a Waco rehab?
The end of Texas's circuit breaker changes a Waco rehab exit because the 20% annual cap on appraised value for non-homestead real property valued at $5,320,000 or less expires Dec. 31, 2026, per the Comptroller, so a 2027 sale or refinance should be underwritten on a tax bill with no 20% limit.
What the cap does: for qualifying property, the appraised value is the lesser of market value or the prior year's appraised value plus 20% of it plus the market value of new improvements, per the Texas Comptroller's Valuing Property page.
Who qualifies: real property that is not a residence homestead and is valued at $5,320,000 or less in 2026, excluding land under special appraisal such as agricultural land and timberland. The threshold was $5,000,000 in 2024 and $5,160,000 in 2025, per the same page.
When it starts for an owner: Jan. 1 of the tax year following the first year the owner owns the property on Jan. 1, per the Comptroller.
When it ends: the Comptroller's page states that the circuit breaker limitation expires Dec. 31, 2026.
Put those lines together for a Waco investor buying in late 2026. You would not first own the property on Jan. 1 until 2027, so the cap would not start for you until 2028, after it expires. The 2026 tax bill you prorate at closing may still reflect the seller's capped value, and that number says nothing about your 2027 bill, which will also pick up the value of your renovation.
This is where the hard money comparison becomes an exit comparison. A rehab lender's term will often mature in 2027, right as the new tax bill lands. If the refinance lender sizes the take-out on actual expenses, a higher tax line shrinks the loan it can make. Ask each hard money lender whether it escrows taxes, how it handles a 2027 tax payment that falls inside the term, and what a contractual extension costs if the refinance needs another few months.
What does Texas's rate ceiling mean for a business-purpose hard money loan in Waco?
Texas's published weekly rate ceiling for credit extended for a business, commercial, investment or similar purpose was 18.00% for Sept. 28 through Oct. 4, 2026, per the Office of Consumer Credit Commissioner, but which ceiling governs a specific note is a question for your attorney, so compare quotes on total cost, not coupon alone.
Weekly ceiling: 18.00% in both the consumer and commercial columns for Sept. 28 through Oct. 4, 2026, per the Texas Credit Letter dated Sept. 23, 2026.
Statutory basis: the notice says the ceilings are set by the formulas in Sections 303.003 and 303.009 of the Texas Finance Code.
Business-purpose boundary: the notice defines its commercial column as credit for business, commercial, investment, or other similar purpose, and its consumer column as credit for personal, family, or household use.
A rehab loan to your LLC on a house you will flip or rent is credit for a business or investment purpose, so you are comparing a commercial note. That makes the fee lines as important as the rate: points, extension fees, default interest, draw and inspection fees, and any exit fee. If the deal touches your own home, ask your attorney before you sign.
What has to fit inside the loan term if the exit is a Waco short-term rental?
If the exit is a Waco short-term rental, the city's licensing, inspection and any zoning approval all have to fit inside the hard money term, and Waco regulates short-term rentals by rental type and zoning district, so confirm with the City's planning department that the use is allowed at the property first.
The question that matters most is whether a non-owner-occupied short-term rental is allowed at the parcel at all. Ask the City's planning department for the parcel's zoning and the rules for the rental type you plan before you price the rehab, not after. If the use is allowed, add any approval window, the inspection and any reworks to the rehab schedule, then ask each lender whether its term and extension can absorb them. A cheaper loan that matures before the rental can legally operate is the expensive one.
What do Waco home prices say about the after-repair value?
Waco home prices say an after-repair value needs local closed comps rather than market drift, because FHFA's All-Transactions House Price Index for the Waco metro fell from 406.66 in Q1 2026 to 396.30 in Q2 2026 and stood about 1.0% above Q2 2025, per FRED data updated Aug. 25, 2026.
Q2 2026 index: 396.30 (1995:Q1=100, not seasonally adjusted), per FRED's All-Transactions House Price Index for Waco, TX (MSA).
Q1 2026 index: 406.66, so the quarter-over-quarter change was about -2.5% by our arithmetic.
Q2 2025 index: 392.36, so the year-over-year change was about +1.0% by our arithmetic.
An index is not a comp, but a flat-to-softer read is a reason not to build appreciation into the ARV. Ask each lender whether it orders an as-is and an as-complete value, and what happens to the remaining draws if the as-complete number comes in lower than your budget assumed.
How does an illustrative Waco duplex rehab size up?
An illustrative Waco duplex rehab shows that the lesser of a cost cap and an ARV cap sets your cash in, and that the 2027 tax line can move the exit math; every figure below is our arithmetic on assumed inputs, using NerdWallet's example percentages and the Comptroller's cap rule.
Illustrative (our arithmetic) purchase: $180,000 for a dated duplex, closing in late 2026.
Illustrative (our arithmetic) rehab budget: $60,000, for a total project cost of $240,000.
Illustrative (our arithmetic) after-repair value: $300,000, an assumption you would replace with recent closed sales.
Illustrative (our arithmetic) cost cap: 80% of $240,000 is $192,000, using the loan-to-cost percentage from NerdWallet's example.
Illustrative (our arithmetic) ARV cap: 70% of $300,000 is $210,000, using the ARV percentage from NerdWallet's example.
Illustrative (our arithmetic) cash in: a lender that funds the lesser of the two lends $192,000, leaving $48,000 of your own money before points, closing costs, carry and any draw you float.
Illustrative (our arithmetic) points: each point on $192,000 is $1,920.
Illustrative (our arithmetic) seller's capped value: if the seller's 2025 appraised value was $140,000 and market value was higher, the 2026 limit is $140,000 plus 20% ($28,000), or $168,000, with no new improvements.
Illustrative (our arithmetic) 2027 value: with the cap expired and the renovation finished, an appraisal at the $300,000 ARV is $132,000 above the $168,000 the seller was taxed on.
Illustrative (our arithmetic) tax gap: at an assumed combined rate of 2% (a placeholder, not any Waco taxing unit's adopted rate), the bill moves from $3,360 to $6,000, a $2,640 annual increase, or $220 a month.
That $220 a month comes out of the cash flow the take-out lender sizes against. Plug in the actual adopted rates for the parcel, then pick the hard money term and extension that clear the refinance with that number in it.
How do you get Waco hard money lenders competing for one deal?
You get Waco hard money lenders competing for one deal by sending the same lender-ready file to several lender types at once and holding each to written answers on the five questions, and YieldStack, which publishes this guide, is our top pick for AI-native commercial mortgage brokerage to run that process.
Who "our" means: YieldStack's own editorial team; no independent body ranked anyone here.
Selection criteria: software that compares options across 20,000+ loan programs, brokers who negotiate on the borrower's side, and a fee disclosed up front and paid only at closing.
Role: YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors.
The software finds and compares the financing options; human brokers structure the deal, negotiate the points, draws and extension terms for the borrower, and carry the transaction toward closing. Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed.
Have this ready before you ask for terms:
- Purchase contract: with the closing date that drives your timeline.
- Line-item rehab budget: scope by trade, contractor bids if you have them, and a draw schedule you can live with.
- Comparable sales: recent closed sales near the property to support the ARV.
- Zoning plan: the parcel's zoning district and, for a short-term rental exit, the City's confirmation that the use is allowed there.
- Tax line: the 2026 bill and your own 2027 estimate on the after-repair value.
- Exit plan and track record: sale or refinance, the take-out lender's seasoning rule, past projects and proof of the cash you will put in.
It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing.
Send your Waco deal for side-by-side hard money terms
For the local market overview, see the Waco market page and the statewide Texas market page.
The bottom line
Compare Waco hard money lenders by type on the same five lines: points, rate, leverage basis, draw mechanics and extension terms, and get every answer in writing. Texas's circuit breaker expires Dec. 31, 2026, so underwrite the 2027 tax bill on your renovated value, not the seller's capped one. If the exit is a short-term rental, confirm with the City that the use is allowed at the property and fit any approval inside the term. YieldStack, the publisher, is our top pick for AI-native commercial mortgage brokerage to run that comparison.