LendingHome claims to make real estate lending as simple, transparent, and accessible as possible for borrowers and investors alike. In fact, LendingHome claims that borrowers may be able to close their business or commercial loans in just one week, after spending only 5 minutes on their application.
On top of this, LendingHome claims that their state-of-the-art credit engine provides borrowers with low rates, flexible terms, a simple application process, and quick approval for loan amounts ranging between $50K to $999,999. In addition, LendingHome claims to provide investors with “attractive returns, monthly cash flow, lower investment minimums, and the opportunity for increased diversification.”
But does all this mean that LendingHome really is the “most advanced real estate lending platform in the world?” We’ll answer that in a moment, but first, let’s take a look at LendingHome’s application process:
How to Apply for a LendingHome Loan
On the LendingHome home page, you’ll first need to choose the type of property the loan is for (e.g. primary residence, secondary home, non-owner occupied), your requested loan amount, and your property’s value.
After your application is complete, it will be submitted to LendingHome’s screening process, which will taken into consideration factors such as “assessments of property value, equity coverage, borrower real estate experience, additional guarantees, credit history, and more.”
If you’re approved, you’ll be presented with a summary of pre-qualified terms. It’s interesting to point out that, although they promote the fact they’re not a “traditional bank,” LendingHome claims to approach the underwriting process “much like a traditional lender.” Because of this, you may not experience much of an advantage from this standpoint as a borrower (we’ll come back to this in a moment).
Important Note: According to the LendingHome FAQ, their loans are considered short-term investments with stated maturities of between 6 and 12 months, and are only available for business or commercial projects. While this can include single family rentals, LendingHome does not provide loans for owner-occupied properties.
Throughout the process, you’ll be able to watch your loan as it goes through LendingHome’s process flow, including information requests, in addition to completing your borrower checklist, uploading documents directly, chatting with your Relationship Manager, and more.
What Types of Loan Products Does LendingHome Offer?
According to LendingHome’s FAQ, they currently only offer “purchase and refinance business and commercial purpose loans with interest-only payments for 6 or 12 month terms, with a balloon payment at maturity. Eligible properties include 1-4 unit residential dwellings, including townhomes, as well as properties that are being rehabbed and “flipped.”
This means that if you’re a borrower for a business or commercial project, you need to be prepared to fully repay your loan within one year. However, if you’re an individual looking for a loan on an owner-occupied property (e.g. primary or secondary home), then you’ll need to look elsewhere.
In addition, your project will need to be located in Arizona, California, Colorado, Georgia, Michigan, Nevada, North Carolina, Tennessee, Texas, or Washington, and the maximum loan-to-value ratio you’ll receive is 80%.
How Does LendingHome Make Loans?
LendingHome claims that the vast majority of their capital comes from investors such as “private equity firms, hedge funds, banks, asset managers, family offices, and more.” Essentially, LendingHome lends money directly to borrowers, and then wholesales their loans to the secondary market.
The second method that LendingHome uses to make its loans is through private, accredited investors who purchase “Platform Notes” (e.g. payment dependent promissory notes), which can amount to all or part of a loan. Note: According to LendingHome, these platform notes are not secured, are not reviewed by the SEC or state regulators, and are considered highly risky. In fact, these notes aren’t even investments in real estate, but are instead “akin to participations in mortgage loans.”
Are Borrowers or Investors Talking About LendingHome?
Interestingly, although LendingHome has been in business since 2013, there weren’t any online customer reviews available at the time of our research (we’ll talk more about this in the final section).
However, the company, which is based out of San Francisco, CA, holds an A- rating with the Better Business Bureau, based on just 1 closed complaint (as of 2/9/15).
LendingHome Rates & Fees
For borrowers: A LendingHome loan will cost you $199 for an application fee, as well as an origination fee of up to 2.5% of the principal amount. Other fees and charges may be assessed depending on your loan approval. Thankfully, there are no penalties for paying off your loan in advance.
For investors: You will need to fill out an application to be classified as an “accredited investor,” which means you’ll need to meet certain minimum annual income or net worth threshold. Also, keep in mind that $10,000 is the minimum required capital to invest in a LendingHome product, but participation in individual notes can be as low as $100. According to the company, investors can generally expect yields ranging from 8.0-17.75%.
Whether you’re a borrower or an investor, you can contact customer service at 844-415-4663 for additional information about LendingHome’s rates and fees.
Who Will Benefit Most from Using LendingHome?
Chopping to the point: Overall, it seems that LendingHome is ideally suited to 2 markets:
- Borrowers involved with small-to-moderate sized business/commercial real estate projects who are in need of short-term loans, and who have a track record of success.
- Investors looking to earn money by providing short-term loans to borrowers.
Because business borrowers are often looking for a quick infusion of cash, and investors are generally looking for unique investment options with higher-than-average returns, it appears that LendingHome may be a good way to bring the two together (similar to RealtyShares). However, since neither of these market segments tend to write many online reviews, it’s difficult to gauge overall satisfaction levels.
With this said, we found cumbersome that you’re required to sign up for a LendingHome account just to find out which options/loan types they offer, so they may not be quite as transparent as they advertise.
0 out 1 people found this review helpful
Best Possible Experience with Lending Home
Gabe at Lending Home won me over when I was looking at various lenders. He wasn't trying to sell me, he wasn't pushy, he was just there to help provide me the answers to the questions I had. He was so competent which made me feel comfortable using them as my lender.
They were able to get me a much lower rate than the first mortgage company I was working with.
The process was very smooth and they have a very user friendly portal. You can even see the interest rate calculations online.
They pulled strings and got me closed on my home mortgage in a very short time frame. April was also wonderful and in constant communication with me daily.
Gabe & April are the definition of customer service. I wish every business operated as they did.
Thank you lending home for a smooth lending experience and top notch customer care.
Bottom Line: Yes, I would recommend this to a friend
3 out 4 people found this review helpful
Rude, No Communication, No Answers, Leave You LOST.
We started dealing with this company and at first everything was professional and great. Then they changed our account manager and the new one leaves without us knowing and could not get any information or call backs for weeks. Then we get another one and then 2 weeks later we had to start all over again with a fresh one, who acts fresh out of college, was not trained and after he couldn't answer our questions stopped communicating with us altogether. We find out on our own our loan was dropped and we get the process restarted and doing it OURSELVES and with no help from their loan analysts and processor or the account manager we finally get a construction loan done. Only to be told we cannot get our draws. We have tried and tried to ask what the procedures are and for help and have gotten NONE! My advice is to try anyone else but LendingHome.
Bottom Line: Yes, I would recommend this to a friend
6 out 6 people found this review helpful
Dishonest, incompetent, and probably criminal
The most shady business transaction you will ever be involved with. Document requirements will change without notice 28 days after everything requested has been provided. Deadlines will be missed over and over, and lies will spew endlessly.
Worst experience I've ever had with any company ever. Stay as far away as possible.
Bottom Line: No, I would not recommend this to a friend
19 out 19 people found this review helpful
Scam and run around
Lending home appears to be immersed in the practice of gathering $199 application fees without consummating loans. I applied and offered full transparency with an impeccable credit rating, a net worth of 20x times the loan value, and a loan request that was 50% of the value of the house financed. They hit me with repeated requests for documentation that clearly indicated that they had not reviewed the documents that I had uploaded to them, and ultimately placed demands to get financing that were absurd and ridiculous for a small time renter, the exact profile of the people that they attempt to lure. It appears to me as though they clearly went after the application fee and had no value for an on-going loan or building a reputation with an up and coming business that had already invested considerably in this business. Too bad. They missed a great opportunity here.
Bottom Line: No, I would not recommend this to a friendView all 1 commentsHide comments
Aug 28, 2015
Thank you for bringing the issue to our attention. We believe this issue has already been resolved. Please contact us at 415-202-6400 if there are any additional questions or concern.