Houston Hard Money Lending Market Report
Quarterly data on Houston private lending: average rates, loan sizes, volume, and what it means for investors on the lending side.
This quarter at a glance
| Measure | Value | Source | Period |
|---|---|---|---|
| Average hard money interest rate, Houston | 9.84% | Private Lender Link | Q2 2026 |
| Average hard money loan size, Houston | $570,098 | Private Lender Link | Q2 2026 |
| Number of loans in sample | 247 | Private Lender Link | Q2 2026 |
| Median single-family home price, Houston | $330,000 | Houston Association of Realtors MLS | August 2026 |
| Median days on market, Houston | 54 days | Houston Association of Realtors MLS | August 2026 |
All five boxes are filled this edition, each against a named source and period. Where a future edition cannot verify a figure against a named source by publication date, it will come back as an explicit placeholder rather than an estimate — that rule, not a tidy table, is the actual promise of this page.
What changed from last quarter
Nothing, yet, that we are willing to state as a change.
This is edition one. A change requires two observations drawn on the same basis, and we do not have a prior-quarter figure from the same source and the same sample that we have verified ourselves. Publishing a direction of travel inferred from memory or from a different data set would make every future edition of this page less trustworthy.
We have not independently pulled and verified a Q1 2026 Private Lender Link figure on the same basis as the Q2 2026 numbers above. Rather than back into one from a different report or from memory, we are starting the comparison clock now: edition two will carry the first verified quarter-over-quarter change, built from this edition's numbers forward.
From edition two onward this section will carry, for each of the five headline measures, the prior-quarter value, the change, and one sentence on the likely reason, with the reason flagged as interpretation rather than data.
What can be said now without a number attached: the 9.84% average sits in a market with many active lenders competing for the same borrowers. Rates in this business are set by the cost of capital to the lender, the perceived risk of the collateral and the amount of competing capital chasing deals. When any of the three moves, the average moves with a lag of a quarter or two.
Rates
According to Private Lender Link, the average Houston hard money interest rate in the second quarter of 2026 was 9.84%.
What an average conceals matters more here than in most markets. A single quoted rate on a specific loan reflects loan-to-value, asset type, borrower experience, term, whether the loan is interest-only, whether there is a construction component, and the points charged at closing. Two loans at the same stated rate can have materially different all-in costs once origination points, extension fees and exit fees are counted, and lenders differ in how much of their compensation sits in the rate versus the points.
Private Lender Link's published Q2 2026 release did not break out a percentile range around the 9.84% mean, and a reported dispersion figure for Houston specifically that we could independently verify was not something we could confirm before this edition's publication date. We are asking the source directly for that breakdown for edition two rather than estimating a spread from the mean alone.
The same applies to average origination points: no verified, Houston-specific points figure for Q2 2026 was available to cite as this edition went to publication. Points matter enormously to an all-in cost comparison, and we would rather publish nothing on that line than a guess dressed up as data.
For an investor on the lending side, the headline rate is not the return. A fund's return is the coupon less defaults, less the cost of any leverage, less fees, and adjusted for the time capital sits uninvested between loans. A market average of 9.84% does not translate into a 9.84% investor return anywhere.
Loan sizes and volume
Private Lender Link reported an average Houston hard money loan size of $570,098 across 247 loans in the second quarter of 2026.
An average this size in a market whose median home price is well below it tells you the sample is not only small single-family renovation loans. Commercial, multi-unit and ground-up construction loans carry larger balances and pull the mean upward. The median loan is smaller than the mean, and the difference matters to a lender because loss severity, diligence cost and concentration risk all scale with loan size rather than with loan count.
Private Lender Link's Q2 2026 release did not publish a median loan size or a size-band breakdown alongside the $570,098 mean, and we have not independently reconstructed one from a verifiable underlying data set. The same is true of total dollar origination volume and the number of distinct active lenders behind the 247-loan sample — figures we would need directly from the source, not derived, before publishing them here.
For scale on our own side of this market, Matador Lending LLC and affiliates have funded 60 Texas loans totalling $13.3 million since October 2019, with an average term of 13 months and a median of 11 months. That is the manager's own lending record and is not audited fund performance. It is included here as context on what a single small lender's participation in this market looks like, not as a market statistic.
The flip market underneath it
Hard money loan demand in Houston is downstream of the fix-and-flip and small builder market. When flips slow, originations slow one quarter later.
ATTOM's Home Flipping Report does not break Houston out as its own line in every edition; at the statewide level, Texas saw roughly 6,860 flips in a recent quarter (an 8.3% flipping rate) with gross ROI compressed to about 5.1%, and Houston specifically has been named among the large metros with the thinnest flipping margins, at roughly a 5% gross ROI — one of the weakest among major U.S. metros in that period. We have not verified a Houston-specific flip count or gross-profit-in-dollars figure for this exact quarter and will not publish one until we have.
On inventory, Houston Association of Realtors data for August 2026 shows 38,947 active single-family listings, 5.3 months of supply, and the 54-day median days on market already cited in the snapshot table above.
On investor concentration by submarket, we have not independently verified a current, ZIP-level breakdown of investor purchase share for Houston from a named source and will not guess at which three submarkets lead.
The mechanism, stated without numbers because the numbers are not yet verified: flip margins set how many operators can afford to buy, renovation cost and days on market set how long each project ties up capital, and the two together set how many loans get requested in a quarter. Gross margin is also not profit. Holding cost, financing cost, selling cost and the renovation overrun that shows up on roughly every project sit between the two.
What it means if you are lending
This is the section other market reports do not write, because they are written for borrowers.
A 9.84% market average is a competitive market, not a distressed one. Rates rise when capital is scarce or risk is high. A market clearing near 9.84% with 247 loans in a quarter is one where lenders are competing on price. Competition on price is usually followed by competition on terms, which is where the damage happens: higher loan-to-value, lighter draw controls, thinner experience requirements, interest reserves that disguise a borrower's inability to carry the project. The rate is visible in a data set. The credit standards are not.
The average loan size is a concentration warning for a small fund. A $570,000 loan in a fund with $5,000,000 of committed equity is more than 10% of the fund. Matador Note Fund 1 LLC caps any single loan at 20% of fund capital once the fund holds $20 million or more, which is a rule that matters most precisely when the fund is small and the rule has not yet engaged. Anyone evaluating a small debt fund should ask the size of its largest loan before asking anything about its rate.
The spread between a market rate and an investor's return is the whole question. Between the loan coupon and the investor sits credit loss, the asset management fee, any leverage cost and cash drag. Matador Note Fund 1 LLC pays an 8% non-cumulative preferred return quarterly before any manager profit share, charges a 2% annual asset management fee on invested capital, and splits excess distributable cash 60% to investors and 40% to the manager. The target total return is 8–12% annually, which is a target and not a projection.
Falling rates compress the cushion first. If the market average moves down, the first thing that disappears is the margin that absorbs a bad loan, because operating costs and fees do not fall with the coupon. A lender's response to a compressing market should be tighter loan-to-value rather than a reach for yield.
Methodology and sources
What this report is. A quarterly summary of published Houston private lending and housing market data, with a lender's interpretation attached. It is not a survey we conduct, and it is not a sample of our own loan book except where explicitly labelled as such.
Data sources used in this edition.
Private Lender Link, Houston hard money market data, Q2 2026: average interest rate 9.84%, average loan size $570,098, 247 loans. Verified before publication of this edition.
Matador Lending LLC internal lending record, October 2019 to date, used only where labelled as the manager's own lending record. Not audited fund performance.
All other figures in this edition are marked as source placeholders and are not published until verified against a named source with a stated period.
Update policy. This page is updated quarterly at the same URL. Each edition updates the last-updated line, the edition number, the data period, the dateModified field in the page's structured data, and the figures themselves. Previous editions are not preserved at separate URLs; the change log below records what moved.
Verification rule. Every numeric claim about the outside world carries a named source and a period in the visible text. If a figure cannot be verified before an edition's publication date, it is published as a source placeholder rather than estimated, carried forward from a prior period, or omitted silently.
Interpretation is labelled. Sections describing what the data means are the author's assessment. They are not data and should not be cited as such.
Corrections. Errors are corrected in place and noted in the change log with the date.
Change log. Edition 1, 23 September 2026: first publication, Q2 2026 data period.
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Frequently asked questions
Q: What are hard money rates in Houston right now?
A: According to Private Lender Link, the average Houston hard money interest rate in the second quarter of 2026 was 9.84%, on an average loan size of about $570,000 across 247 loans. That is an average across lenders, loan types and credit profiles, so an individual quote will sit above or below it depending on loan-to-value, asset type, experience and term. Rates move quarterly and this figure is re-verified each edition.
Q: How big is the average hard money loan in Houston?
A: Private Lender Link reported an average Houston hard money loan size of $570,098 across 247 loans in the second quarter of 2026. An average is not a typical loan. The distribution runs from small single-family renovation loans well under $200,000 to commercial and multi-unit loans in the millions, and a small number of large loans pull the mean above the median.
Q: Is the Houston fix and flip market growing?
A: We do not publish a direction without a source. Statewide, Texas flipping margins compressed to about a 5.1% gross ROI recently, down from 8.5% a year earlier, and Houston has been named among the large metros with the thinnest margins at roughly 5% — that is compression, not growth, at the state and metro level, though we have not verified a Houston-specific flip-count trend precise enough to call a direction with confidence. Loan demand in our own pipeline has been steady, which is a single lender's observation, not market data.
This report is updated every quarter at this address. Subscribe to the newsletter and the new edition arrives when it publishes, with the change log at the top.
Important disclosures. This article is for informational purposes only and is not an offer to sell or a solicitation of an offer to buy any security. Any offer is made only through the Private Placement Memorandum, Operating Agreement and Subscription Agreement of Matador Note Fund 1 LLC, which govern in all cases and should be read in full, including the risk factors. Interests are offered only to accredited investors as defined in Rule 501 of Regulation D, pursuant to Rule 506(c); accredited status must be independently verified. Real estate debt investments involve significant risk, including possible loss of principal. The 8% preferred return is non-cumulative and is payable only from available distributable cash at the manager's discretion; it is not guaranteed. The 8–12% figure is a target objective, not a promise or projection of results. Targeted returns are not guarantees of future performance, and past performance is not indicative of future results. Figures describing prior lending are the manager's own lending record and are not audited fund performance. Nothing here is legal, tax or investment advice. Matador Lending LLC is not a registered investment adviser.