Hard money lenders in Rhode Island: usury, licensing, foreclosure speed and costs
For a lender or an investor, one fact frames everything in Rhode Island: rhode Island’s 21% usury cap and broad lender licensing make it one of New England’s more regulated hard money states, though its non-judicial sale (three to six months, with a mandatory mediation conference) is faster than its neighbors.
| Foreclosure process | Non-judicial |
|---|---|
| Typical time to sale | 3 to 6 months from first notice or filing |
| Post-sale redemption | Rhode Island provides no statutory right of redemption after the foreclosure auction. |
| Deficiency judgment | Allowed |
| Usury | Rhode Island caps interest at the greater of 21% or 9% above the Treasury rate, and the cap applies to most loans including business-purpose loans unless the borrower is a commercial entity meeting statutory conditions; hard money lenders in Rhode Island structure carefully and keep all-in pricing within the cap. |
| Transfer tax | Rhode Island’s real estate conveyance tax is $2.30 per $500 (0.46%), paid by the seller; an additional rate applies to the portion of a sale above $800,000. |
| Median home price (approx.) | $470,000 · property tax about 1.4% |
Can a lender charge 12% in Rhode Island? Usury and business-purpose exemptions
Rhode Island caps interest at the greater of 21% or 9% above the Treasury rate, and the cap applies to most loans including business-purpose loans unless the borrower is a commercial entity meeting statutory conditions; hard money lenders in Rhode Island structure carefully and keep all-in pricing within the cap.
Usury statutes are amended and interpreted by courts; this is an orientation, not a legal opinion. Any loan structured near a cap should be reviewed by a lawyer licensed in the state.
Do hard money lenders need a license in Rhode Island?
Rhode Island requires a lender license for loans secured by residential property, with limited exemptions for business-purpose lending; the Department of Business Regulation administers licensing and construes the requirement broadly. Check licensing claims against the state regulator and NMLS, and apply the twelve questions in how to find hard money lenders.
How fast a lender gets the property back in Rhode Island
Speed of recovery is the first thing a hard money lender prices. In Rhode Island, foreclosure is non-judicial: Rhode Island mortgages contain a power of sale. For owner-occupied one-to-four family homes, the lender must first send a notice of mediation conference and obtain a certificate from the mediation coordinator. It then mails the notice of sale at least 30 days before the auction and publishes it for three consecutive weeks; the sale is held at the property or as stated in the notice. From the first formal notice or filing, a typical uncontested case reaches a sale in 3 to 6 months.
Rhode Island provides no statutory right of redemption after the foreclosure auction. The homeowner may pay the full amount due to stop the sale before it occurs.
A Rhode Island lender may sue the borrower for the deficiency remaining after a foreclosure sale. The borrower is credited with the sale price, and the lender must have conducted the sale in a commercially reasonable manner. Full homeowner-side detail on our Rhode Island foreclosure page; the investor-side consequences are in hard money default.
Costs on the way in and out
Rhode Island’s real estate conveyance tax is $2.30 per $500 (0.46%), paid by the seller; an additional rate applies to the portion of a sale above $800,000. Count it on both sides of a flip. Carrying costs add Rhode Island’s property tax at about 1.4% of value a year — near $6,580 on a median-priced $470,000 home — plus insurance and utilities for every month of the hold.
Rhode Island buyer closing costs — attorney, title, lender fees and prepaids — typically total 2% to 3% of the price, with the conveyance tax on the seller.
Where investors are active in Rhode Island
Providence, Pawtucket, Cranston, Warwick and Woonsocket are the investor markets, with multifamily two-to-four unit properties a classic Rhode Island asset; Newport and the South County shore are seasonal and higher-priced niches.
Investor activity data (ATTOM and similar) shifts yearly; verify with current local comps before committing capital.
Frequently asked questions
Is hard money lending legal in Rhode Island?
Yes. Rhode Island caps interest at the greater of 21% or 9% above the Treasury rate, and the cap applies to most loans including business-purpose loans unless the borrower is a commercial entity meeting statutory conditions; hard money lenders in Rhode Island structure carefully and keep all-in pricing within the cap. Rhode Island requires a lender license for loans secured by residential property, with limited exemptions for business-purpose lending; the Department of Business Regulation administers licensing and construes the requirement broadly.
How fast can a hard money lender foreclose in Rhode Island?
Under Rhode Island’s non-judicial process, a typical uncontested case takes 3 to 6 months from the first notice or filing to the sale. Rhode Island provides no statutory right of redemption after the foreclosure auction.
What does a typical hard money loan cost in Rhode Island?
Market-wide, roughly 9% to 14% interest and 1 to 4 points; on a loan of $399,500 (85% of the state’s rough $470,000 median) at an illustrative 11% with 2 points, nine months costs about $40,948 in interest and points before fees. See rates, points and LTV.
Related guides
- BRRRR: refinancing a hard money rehab into a conventional or DSCR loan
- Hard money for beginners: your first loan, step by step
- How hard money lenders evaluate ARV — and how to estimate it yourself
- Hard money exit strategies: sell, refinance, or hold — and the plan B
Also for this state: first-time home buyer programs in Rhode Island · foreclosure in Rhode Island.