American Loans Private Lending FAQs

American Home Loans has been serving the local community for over 31 years, specializing in Conventional, FHA, VA, Construction, and Commercial loans. Occasionally, we work with borrowers who don’t yet qualify for conventional financing. In these cases, we offer what we call a Bridge Loan—a short-term solution that allows the borrower time to prepare to qualify for a long-term loan or sale of their property. These Bridge Loans are funded by Private Lenders like you, creating an opportunity for you to participate in private lending with higher than market interest rates while helping borrowers transition into permanent financing. All our Bridge loans are secured by real estate with large equity.

While your funds are not FDIC insured, they are protected with collateral through a recorded lien on the borrower’s property. We partner with insured and independent title companies to manage this process. Your funds can be delivered directly to the title company, which records your lien with the County Recorders Office.

This lien ensures that the property owner cannot sell, refinance, or take out additional loans on the property without first paying off your loan. Importantly, the funds on your loan are secured independently of American Home Loans. Even if, for any reason, our company could not continue operations, your lien remains in place, and your funds remain protected by the property itself.

This provides the peace of mind that your funds are backed by real estate collateral and safeguarded through an independent third party with Title Insurance on the property, ensuring both transparency and security.

Every Bridge Loan undergoes a strict evaluation process to assist you as the Lender in protecting your position and ensure repayment. We verify the borrower’s financial qualifications, evaluate the property’s market value and review all existing liens.

Loans are not considered solely because a borrower has equity in their property. Instead, each loan must meet specific criteria:

• Loan-to-Value (LTV): Typically, loans are not approved unless the borrower has a strong equity position. We advise not to go above 70% total loan to value.
• Credit Review: While we work with borrowers who may not qualify for conventional financing, we still review credit history and require a clear plan for improvement, often working with them to ensure their progress toward more permanent financing. 

• Exit Strategy: Every loan is structured with a defined path for repayment—either by qualifying for a long-term conventional loan within 6 to 14 months, or through the sale of the property.


By maintaining conservative lending standards and requiring a realistic repayment plan, we help safeguard your funds while giving borrowers a pathway to long-term financial stability.

Yes. After your evaluation of the loan qualification, as the lender you are the decision maker of how your funds are being placed for a loan. And if there is something on a loan of which you don’t approve, you do not have to participate. Once we’ve completed our vetting process, we provide you with all the key details about the loan opportunity, including:

1. Property Information: Address, type of property, estimated value and equity position based on our research but we always encourage you to obtain your own evaluation before deciding on the value of the property 

2. Borrower Profile: The borrower’s qualifications, credit considerations, and overall repayment plan.

3. Exit Strategy: How and when the loan is expected to be paid back—whether through refinancing into a long-term loan or through the sale of the property.


With this information, you decide whether to fund a specific loan. We believe transparency is essential, so you’ll always have the opportunity to review the facts and make an informed choice before making a loan. Most importantly, you are never obligated to participate in a loan that you are not comfortable with.

It is important to understand that you are not giving the funds to American Home Loans and we decide how to use those funds. That is NOT our model of operation. We want you to have full control of your funds on where and when those funds are being loaned out to a Borrower who qualifies.

If a borrower falls behind on payments, our first priority is to work with them to resolve the issue and avoid foreclosure whenever possible. However, if repayment cannot be reached, we move forward with the foreclosure process.

We partner with experienced attorneys to handle the foreclosure. Once the property is sold, you as the lender are paid from the sale proceeds. You keep the equity value of the property, minus the legal costs of foreclosure, which typically averages around $4,200.

Example Scenario:

• Property Value: $400,000

• Bridge Loan Balance: $250,000

• Estimated Foreclosure Costs: $4,200


If the borrower defaults and the property is sold, you as the lender would recover your $250,000 loan balance plus up to $145,800 in equity (after deducting legal costs), depending on the final sale price of the property.

Our top priority is to make sure your loan remains protected by the property itself, giving you a secure path to recover your funds—even in the event of a borrower’s default.

For convenience and reliability, we set up borrowers on automatic payments (ACH). We collect those payments in your behalf and then forward the payments directly to you with whatever method you prefer—ACH transfer, wire, or check.

This streamlined process ensures consistency, reduces delays, and gives you flexibility on how you receive your loan payments. Depending on the initial set up of the loan you would receive the payments every month or every quarter until the loan is paid off.

You can participate with other Private Lenders like you to pool together your funds. You would receive a percentage of the payment amount based on the percentage you have contributed of the total loan amount.

For example:

You and other Private Lenders have approved a loan of $ 400,000.00 but you can only contribute $100,000.00 or 25% of the total loan amount. Assuming the interest rate on the loan is 9%, the minimum monthly payment would be $3,000.00. You would receive 25% of that monthly payment amount or, in this case, $750.00 a month. You would be recorded as a 25% beneficiary of the Deed of Trust on the Property.

If the property sells in Foreclosure for $550,000.00 and there is a $150,000.00 gain difference between what is owed and the sale amount of the foreclosure sale, you would receive 25% of that difference. In this case you would receive $37,500.00 in addition to the $100,000.00 you originally lent on the property, plus the monthly payments you received until the foreclosure sale.

American Home Loans assists with the loan Process in your behalf in order that the loan can be completed with the proper documentation and in accordance with accepted procedures. This may include the following:

• Loan Processing: Preparing proper Documents and Disclosures, such as the Deed of Trust and Trust Note, coordinating with the title company, attorneys and finalizing the loan closure.
• Borrower Communication: Serving as the main point of contact for the borrower throughout the loan.
• Payment Management: Collecting payments from the borrower and remitting them to you via ACH, wire, or check.
• Foreclosure Handling: If necessary, managing the foreclosure process and arranging the sale of the property.

When the loan is paid off, the title company distributes the funds directly back to you. At that point, you can choose to lend on another Bridge Loan opportunity or use the funds however you wish.

Our role is to make the process simple, protect your Private Loan funds, and give you the confidence to know that every detail is handled with professionalism and care.

As mentioned above, It is important to understand that you are not giving the funds to American Home Loans and we decide how to use those funds. That is NOT our model of operation. We want you to have full control of your funds on where and when those funds are being loaned out to a Borrower who qualifies.

To establish the property’s value, we typically provide an appraisal from an independent, Utah State–certified appraiser. In addition, we also review other market data sources, like Zillow and Realtor.com, to ensure accuracy and transparency.

We also require that you, as the Lender, do your own due diligence. You are welcome to personally inspect the property or order an official appraisal from a Utah State–Certified Appraiser of your choice in addition to the one we may order.

Here’s an example of how the valuation process works: If a property is valued at $400,000 and the Bridge Loan balance is $250,000, that leaves $150,000 in equity. This equity serves as your cushion, helping protect your loan even if the borrower defaults.

This approach makes sure you have a clear and reliable understanding of the property’s value and equity position before deciding whether to lend or not on a particular property.

Yes—in most cases, you can use your self-directed IRA funds to lend on our Bridge Loan Program. Many Private Lenders choose this option as a way to diversify their retirement portfolio while earning secured, short-term returns backed by real estate.

We recommend checking with your IRA administrator (the company that manages your retirement account) to confirm eligibility and ensure the proper setup. We will gladly work with them to make the process smooth and straightforward.

If your current IRA Administrator does not provide Self-Directed IRA programs, we can recommend several Banks and Independent Administrators with whom we have worked for many years and are familiar with our Bridge Loan Program

No—there are no fees for you to participate as Private Lender. Every dollar of the funds you lend go directly toward funding the secured Bridge Loans, with no hidden charges or upfront costs.

American Home Loans earns its compensation from the borrowers, not from you as the lender. In this way, your funds work entirely for you, earning returns without added expenses.

We understand that unexpected needs can arise. While Bridge Loans are designed to be held until repayment, in certain cases we’ve been able to match a lender that may need his or her funds sooner than the loan dateline with another lender willing to step into the loan and take his or her place.

That said, this option cannot be guaranteed and is handled on a case-by-case basis. For this reason, we encourage Private Lenders to plan on committing their funds for the full loan term, which typically ranges from 6 to 14 months.

Our goal is always to work with you and explore solutions if such a situation arises.

The Short Answer: Yes—like all real estate lending, there is risk, including the potential loss of principal. However, American Home Loans is committed to minimize that risk through strict loan standards, short-term structures (6–14 months), the Private Lender control of his or her funds, and a proven track record of success since 2008 with NO losses on our Bridge Loan program.

In Detail: Bridge Loans, like any lending instrument, carry some level of risk. Here’s how we reduce and manage that risk for you as a Private Lender:

• Strict Loan Standards: We carefully vet every loan and reject those that do not meet our criteria. Unlike many “hard money lenders,” we don’t lend simply because a property has equity. Our focus is on the repayment ability of the borrower and a clear way for your loan to be repaid.
• Short-Term Structure: Bridge Loans are short-term (typically 6–14 months), which helps shield your funds from long-term market volatility.
• Private Lender Involvement: You decide whether to fund a specific loan. If you’re not comfortable, we won’t proceed.
• Proven Track Record: With over 31 years in lending, an A+ BBB rating, and strong Google reviews, American Home Loans has been a trusted leader in our market with over $2.5 Billion in loan originations. Since 2008, we have not experienced any losses in our Bridge Loan program—even through the 2007–2008 financial crisis that closed many of our competitors.
• Federal and State Regulated: We are regulated by the Utah Department of Real Estate, the Department of Financial Institutions, and the Nationwide Multistate Licensing System (NMLS), ensuring compliance with strict lending standards.

While no lending instrument is ever risk-free, our long history, conservative lending practices, and regulatory oversight provide Private Lenders with confidence and peace of mind as we work together to create a better future both for you and our borrowers. Borrowers that may not have any other option to keep their home or better their financial future.