Borrower Marketplace Addendum

This Borrower Marketplace Addendum (this “Borrower Addendum”) applies to you if you register an account as a “Borrower” or otherwise seek, request, or accept credit through the Hardline platform (the “Service,” as defined in the Terms of Service). It supplements the Hardline Terms of Service and the Risk Disclosure Statement. In case of conflict regarding Borrower-specific subjects, this Borrower Addendum controls. Capitalized terms used and not defined here have the meanings given in the Terms of Service and in the Definitions Index.

You represent, warrant, and covenant, as of the date you submit any deal to the Service, as of the date any term sheet is accepted, as of the date of each funding of loan proceeds, and on a continuing basis throughout the term of any loan obtained through the Service, that:

(a) Use of Proceeds. One hundred percent (100%) of the loan proceeds will be applied to one or more of the following business, commercial, or investment purposes, and no portion will be applied to any personal, family, or household purpose:

• acquisition of real property held for investment, rental, or resale and not for occupancy by you, any guarantor, or any immediate family member;
• rehabilitation, renovation, repair, or construction of such real property;
• refinancing of an existing business-purpose loan secured by such real property;
• acquisition or refinancing of an existing rental portfolio held by you or your affiliates;
• working capital, deposits, points, or closing costs of your real-estate investment business;
• repayment of an existing business loan made to you or your entity in connection with such real property.

No portion of the proceeds will be applied to repay any personal debt (including any debt secured by your principal residence), to fund any personal expenditure, or to purchase any personal-use asset.

(b) Property Use and Occupancy. The real property securing the loan (the “Property”) is, and during the term of the loan will be, held solely for investment, rental, rehabilitation-for-resale, or commercial purposes. The Property is not, and during the term of the loan will not be, occupied as a principal dwelling, second home, vacation home, pied-à-terre, or any other residence by:

• you;
• any guarantor of the loan;
• any “immediate family member,” defined for purposes of this Addendum as any spouse, domestic partner, parent, child, sibling, parent-in-law, sibling-in-law, child-in-law, or any individual residing in your or any guarantor’s household; or
• any entity in which you, any guarantor, or any immediate family member holds a beneficial interest.

The Property has not, within the twelve (12) months preceding the date of this certification, been occupied by any person described above as a principal dwelling, second home, or other residence.

(c) Comment 3(a)-3 Factor Recital. You further represent, with respect to the five factors identified in Official Staff Commentary to Regulation Z, 12 C.F.R. § 1026.3(a), Comment 3(a)-3:

• Primary occupation. Your primary occupation, or the primary business of the borrowing entity, includes the acquisition, rehabilitation, leasing, management, or resale of investment real property. If your primary occupation is otherwise, you nonetheless engage in real-estate investment as a substantial business activity, separately accounted for and separately taxed.
• Personal management. The Property is, or will be at closing, managed by you, your affiliate, or a third-party property manager in a business capacity; the Property is not maintained as if it were a personal residence.
• Income ratio. You expect a material portion of your income (or, in the case of an entity borrower, substantially all income) attributable to the Property to come from rents, resale proceeds, or other business returns, and not from personal use.
• Transaction size. The size of the loan is consistent with the acquisition, rehabilitation, or refinancing cost of a real-estate investment property and is not consistent with personal consumption.
• Statement of purpose. You hereby state in writing, and the Lender will rely upon your statement, that the loan is for business, commercial, or investment purposes only. You acknowledge that this statement is one of five factors and that the Lender is entitled to corroborate the remaining factors from documents and information you provide.

(d) Form of Disbursement. Loan proceeds, other than amounts paid at closing to third parties (sellers, contractors, taxing authorities, the Lender, or other costs of closing), will be disbursed to the borrowing entity’s business operating account, and not to any personal account of you or any guarantor.

(e) Insurance. The Property is or will be insured under a landlord, dwelling-fire, commercial property, or builder’s-risk policy appropriate to its non-owner-occupied investment use, and not under a homeowner’s policy.

(f) Acknowledgment Regarding “Dwelling” Status. You acknowledge that the Property may meet the definition of a “dwelling” under Regulation Z (12 C.F.R. § 1026.2(a)(19)). You and the Lender have nonetheless determined that the loan is not a consumer credit transaction because the loan is extended primarily for business, commercial, or investment purposes within the meaning of 12 C.F.R. § 1026.3(a). You acknowledge that the consumer-credit protections of the Truth in Lending Act, including any right of rescission under 15 U.S.C. § 1635, are not intended by the parties to apply on the basis of the foregoing.

(g) Reliance and Survival. You acknowledge that the Lender and Hardline will rely on the foregoing certifications in deciding whether to extend credit and in operating the Service. The certifications in this Section B.1 survive the closing and funding of any loan and remain in effect throughout the term of the loan.

Where you submit a deal under or on behalf of an entity (LLC, corporation, limited partnership, series, or trust), you represent and warrant that:

• The entity is duly formed, validly existing, and in good standing in its jurisdiction of formation.
• You have full authority to bind the entity to any deal, term sheet, communication, document, or transaction submitted through the Service.
• The entity is the rightful owner or contract-vendee of the Property, or has a binding right to acquire it.
• You will promptly provide entity-formation documents, operating agreement, authorizing resolutions, and beneficial-ownership disclosures upon Hardline’s or any Lender’s reasonable request.

You represent and warrant that all information you submit — including property addresses, valuations (purchase price, ARV, as-is value), rehab budgets, exit strategies, income, expenses, credit information, track record, ownership history, lien information, photos, leases, insurance, and financial statements — is true, accurate, complete, and not misleading in any material respect, and you will promptly correct any inaccuracy you discover.

Misrepresentation is a material breachgiving rise to Hardline’s right of immediate termination under Section 17 of the Terms of Service and indemnification under Section 14 of the Terms of Service. Material misstatements may also constitute wire fraud (18 U.S.C. § 1343), bank fraud (18 U.S.C. § 1344), false statement to a financial institution (18 U.S.C. § 1014), or other criminal conduct that Hardline may report to law enforcement.

You acknowledge that all loan terms — including interest rate, points, origination and underwriting fees, term, prepayment terms, default-rate interest, late charges, exit fees, personal-guaranty requirements, covenants, conditions to closing, and remedies on default — are set by the Lender, not by Hardline. Hardline does not negotiate, recommend, or guarantee any loan terms, does not present offers from any particular lender, and does not match you with lenders algorithmically. You are solely responsible for selecting which Lenders may see your deal, for evaluating, negotiating, and accepting (or declining) any term sheet or loan offer, and for obtaining independent legal, financial, and tax advice as appropriate.

Hard-money and private real-estate loans typically include features that are materially different from consumer mortgage loans, such as: personal guaranties from principals; cross-collateralization with other properties; confession-of-judgment provisions (where permitted); higher interest rates and points; short terms (often 6 to 24 months); balloon payments; prepayment penalties; default-rate interest that can be twice or more the contract rate; deed-in-lieu provisions; lock-box arrangements; lender-controlled construction or rehab draws; and accelerated foreclosure or trustee’s-sale timelines.

You are strongly encouraged to retain your own legal counsel before signing any loan document. Hardline does not provide legal advice, does not review loan documents on your behalf, and does not represent your interests in any transaction.

Loan proceeds and closing funds are typically transferred by wire between you, your closing agent, and the Lender, outside of Hardline. Hardline does not generate, verify, transmit, or guarantee wire instructions. Before sending or receiving any wire, you will independently verify wire instructions by voice call to a known and previously verified telephone number for the intended recipient, using contact information obtained outside the Service.

You represent and warrant that:

• You are not, and the entity you represent is not, listed on any U.S. Treasury OFAC sanctions list, owned 50% or more in the aggregate by sanctioned persons, or located in a comprehensively sanctioned jurisdiction.
• Loan proceeds will not be used for any purpose prohibited by U.S. sanctions or anti-money-laundering laws.
• You will promptly notify Hardline if any of the foregoing becomes untrue.

You acknowledge that documents you upload to the Service (deeds, leases, insurance certificates, title commitments, financial statements, photos, scope-of-work documents) will be visible to the Lender(s) you have selected and may be downloaded, retained, and used by those Lender(s) for their underwriting, audit, and recordkeeping purposes consistent with their own policies and applicable law. Hardline is not responsible for a Lender’s handling of your documents once shared.

Violation of this Borrower Addendum — including Sections B.1 (Business Purpose), B.2 (Entity Authority), B.3 (Truth and Accuracy), or B.7 (Sanctions/AML) — is a material breach giving rise to Hardline’s right of immediate termination under Section 17 of the Terms of Service and indemnification under Section 14 of the Terms of Service.

By submitting any deal listing, term-sheet acceptance, or document share through the Service, you re-affirm the representations and warranties in this Borrower Addendum as of the date of submission.

The representations, warranties, covenants, indemnities, and acknowledgments in this Borrower Addendum (including Sections B.1, B.2, B.3, and B.7) survive termination of your account and the Agreement, and survive the closing and funding of any loan obtained through the Service.

Borrower-program inquiries: support@hardlinelending.com

Legal: legal@hardlinelending.com