How to Get Out of a Hard Money Loan in Florida (7 Ways)

Hard money loans can move a project forward in Florida, but when deadlines tighten or rates climb, they become stressful fast.

Many investors reach the end of their term without a clear way to refinance or pay off the balloon.

Get a free exit strategy review and see your best way out of a hard money loan today.

This guide breaks down exactly how to get out of a hard money loan in Florida and the options that work best when time is running short.

What Makes Hard Money Loans Risky in Florida?

Hard money loans in Florida can solve short-term funding gaps, but they become risky when your exit plan slips. Rates often land around 12–15 percent with added points and fees, making them expensive to carry.

Most include balloon payments due in 6 to 24 months, and the short terms leave little room for delays.

Renovation setbacks, insurance issues, permitting slowdowns, or a cooling market can quickly increase the chance of default or foreclosure.

Many investors get stuck because their ARV was too high or their refinance fell through.

The upside is that you still have options. With the right plan, most borrowers can refinance, negotiate more time, or sell before the loan becomes unmanageable.

The 7 Proven Ways to Get Out of a Hard Money Loan in Florida

Before the loan becomes unmanageable, there are several practical ways to ease the pressure and move into safer financing.

Here are the most reliable paths to get out of a hard money loan in Florida.

1. Refinance into a Conventional Mortgage (Best Option in Most Cases)

For many Florida borrowers, moving from hard money into a conventional mortgage is the simplest and most affordable exit. Most lenders look for a minimum credit score around 620 to 640, stable income, and a property that meets standard appraisal and condition requirements. Loan-to-value usually needs to fall in a workable range, often 80 percent or lower, to qualify for favorable terms. The full process typically takes 25 to 45 days from application to closing.

This route may not work if the property is still under renovation, if the appraisal comes in low, or if income documentation is too limited to support approval.

2. Refinance Into an FHA Loan (If Property Qualifies)

If the home can be used as your primary residence, an FHA refinance can be a workable way out of a hard money loan. FHA allows refinances with as little as 3.5 percent equity as long as you meet credit and income guidelines. The property must become your primary residence within 60 days of closing, and it has to pass FHA appraisal standards, which include checks for safety, soundness, and basic livability.

This option does not work for investment properties or homes that still need major repairs.

3. Use a DSCR or Bank Statement Loan (For Investors With Cash Flow)

For investors who cannot qualify for a conventional refinance, DSCR and bank statement loans offer a realistic path out of a hard money loan. Rates often fall in the 6 to 7 percent range or slightly higher, which is still far cheaper than typical hard money terms. DSCR loans in Florida focus on whether the property's rental income can cover the new mortgage payment, while bank statement loans rely on business or personal deposits instead of tax returns.

These options work well when cash flow is strong, but they may not fit if the property is vacant, rents are too low, or deposits do not show consistent income.

4. Extend or Modify Your Hard Money Loan

If you need more time before you can refinance or sell, asking for an extension is often the simplest short-term fix. Many Florida hard money lenders charge a 2 to 4 percent extension fee, and some may adjust the rate or require updated project details. When negotiating, focus on lowering the fee, securing enough extra time to finish your exit plan, and avoiding unnecessary rate hikes or new points.

A simple email request can help open the conversation:
“Hi [Lender], I’m requesting a short extension on my loan to complete the final steps of my exit plan. Renovations are [percentage] complete, and I expect to refinance or sell by [date]. Please let me know the extension terms you can offer so we can keep the project moving.”

5. Sell the Property Before the Balloon Comes Due

If refinancing is not possible, selling the property is often the quickest way to clear the hard money balance and avoid a default. Most investors should plan for a 30 to 60 day timeline from listing to closing in Florida, though cash buyers can move faster if needed. Selling before the balloon date protects your equity and prevents the loan from slipping into late fees or legal action.

This option works well when there is still enough market value to cover the payoff and closing costs, and it helps you avoid foreclosure if the loan is nearing maturity.

6. Bring in a Partner or Silent Investor

If you need capital to pay off the hard money loan but want to keep the project, bringing in a partner or silent investor can provide the funds without taking on new debt. Investors typically receive an equity share based on how much they contribute, and terms are usually outlined in a simple agreement that covers profit splits, management roles, and exit expectations.

This approach works best when the project still has strong upside but you lack the cash or credit to refinance on your own. It is less effective when the property has limited equity or the timeline is too tight to negotiate a fair partnership.

7. As a Last Resort: Deed in Lieu or Workout

If the loan is no longer affordable and the property cannot be refinanced or sold in time, a deed in lieu or workout agreement may help you avoid a full foreclosure. In a workout, you and the lender negotiate new terms to settle the debt, while a deed in lieu transfers the property back to the lender to satisfy what you owe.

Florida law allows both options as long as the borrower agrees in writing and no other liens block the transfer. These paths should be used only when all other exit strategies have failed, since they can affect your credit and future borrowing, but they can still prevent the cost and stress of a formal foreclosure.

Warning Signs Your Hard Money Loan Is About to Collapse

After looking at the main ways to get out of a hard money loan, it helps to know when trouble is starting to build. Certain red flags show up early, and catching them can give you enough time to use one of the exit strategies above.

Multiple extension fees, no clear exit plan, or an inflated ARV often signal that the loan is heading in the wrong direction.

Missed draw payments from the lender, sudden rate jumps, or a balloon deadline that is less than 60 days away are also signs that the loan may soon become unmanageable.

Recognizing these issues early makes it much easier to act before the loan turns into a serious problem.

Florida-Specific Laws You Need to Know

Florida law adds a few extra wrinkles that matter if you are stuck in a hard money loan. Knowing the basics can help you read your paperwork and react before things go off track.

First, balloon mortgages in Florida must clearly disclose the lump sum due at maturity. If the final payment is more than twice the regular payment, the mortgage must include a specific balloon legend; if it does not, the maturity date can be treated as extended so the loan pays off on a regular schedule instead of all at once. 

Second, Florida is a judicial foreclosure state, which means the lender has to sue you in court before selling the property. You typically have about 20 days to respond to the lawsuit, and uncontested foreclosures can move in a matter of months, while defended cases can stretch closer to a year or more.

Finally, Florida usury laws cap interest at about 18 percent for loans up to 500,000 dollars and 25 percent for many larger loans, but commercial and higher balance deals often fall into exceptions or different treatment. That is one reason hard money rates on investment or commercial properties can be very high without clearly violating usury statutes. 

This is general information only, so anyone facing a possible default or foreclosure should speak with a Florida real estate or foreclosure attorney about their specific situation.

What If You Want to Refinance Out of a Hard Money Loan Now?

If your balloon date is coming up or the payments are getting too heavy, the fastest move is to review which refinance options you can qualify for today.

Credit, equity, cash flow, and the property’s condition all shape what path is available, but most borrowers have at least one workable exit if they act early.

Want to get out of a hard money loan?

We help Florida investors refinance into DSCR, FHA, and conventional loans.

Get a free exit strategy review and see your best way out of a hard money loan today.

Florida Refinance Requirements (Quick Checklist)

• Credit score that fits the program (usually 620–640 for conventional, 580–620 for FHA)

• Stable income or acceptable alternative documentation (DSCR or bank statements)

• Sufficient equity or LTV that meets program limits

• Property in livable condition and able to pass appraisal

• Verified home insurance and taxes for the new loan

• Clear title with no unresolved liens

• Recent bank statements, IDs, and basic financial documents

FAQs

Can you refinance a hard money loan in Florida?
Yes. Most borrowers refinance into a conventional, FHA, DSCR, or bank statement loan once the property is finished, rents stabilize, or credit improves. The right program depends on your income, equity, and whether the home can be a primary residence.

Can a hard money lender foreclose on you in Florida?
Yes. Florida is a judicial foreclosure state, so the lender must file a lawsuit and obtain a court order before selling the property. Timelines vary, but uncontested cases can move in a few months, and contested cases can take longer.

How long do you have to get out of a hard money loan?
Most hard money loans in Florida run 6 to 24 months and end with a balloon payment. You generally need an exit plan in place at least 30 to 90 days before the maturity date to avoid default, late fees, or legal action.

What are the risks of a hard money loan?
Common risks include high interest rates, short terms, balloon payments, and tight deadlines for renovations or refinancing. Delays, low appraisals, or market changes can quickly push borrowers toward default if they lack a clear exit strategy.