New York Private Money Lending:
Licensing, Compliance & Documents

By Anthony Geraci, Managing Partner & CEO, Geraci LLP  |  January 2026

New York has a large and active private money lending market, particularly in New York City's five boroughs, Long Island, and Westchester County. High property values drive large loan amounts, and many loans exceed the $2.5 million usury exemption threshold. However, New York's judicial foreclosure requirement, long foreclosure timelines, strict usury enforcement, and mortgage recording tax make it one of the most challenging states for private money lending enforcement.

This guide covers the essential licensing, usury, foreclosure, and document requirements for private money lenders originating loans in New York.

Related: Usury Laws by State  |  Deed of Trust vs. Mortgage Guide  |  How to Lend in Multiple States

Licensing Requirements

New York requires a Mortgage Banker license from the Department of Financial Services (DFS) for companies making consumer mortgage loans. Private money lenders making business-purpose loans are not required to hold this license. However, New York is one of the most heavily regulated states and lenders should consult counsel regarding any licensing questions.

Key Compliance Considerations

New York is a judicial foreclosure state with one of the longest foreclosure timelines in the country. Contested foreclosures routinely take 2-3 years and can exceed 4 years in some jurisdictions. This is the single most important factor for private money lenders to consider before entering the New York market.

The 16% civil usury limit is strictly enforced and applies to most private money loans under $2.5 million. Courts have voided entire loans for usury violations. Default interest, late fees, and other charges may be included in the usury calculation.

New York has mandatory settlement conferences for residential mortgage foreclosures, which can add months to the timeline. This applies primarily to owner-occupied properties but lenders should verify the property's occupancy status.

New York imposes a mortgage recording tax on all new mortgages, which adds to closing costs. The tax varies by county — in New York City, the combined tax is approximately 2.05% for loans over $500,000.

Document Requirements for New York Private Money Loans

New York private money loans require a mortgage as the primary security instrument, along with a promissory note, loan agreement, personal guaranty (for entity borrowers), and state-specific disclosures and compliance riders. For fix-and-flip and construction loans, draw agreements, scope of work exhibits, and completion guarantees are also required.

Automate Loan Docs generates complete, New York-specific document packages that comply with all applicable state requirements. Every template is drafted by the attorneys at Geraci LLP, whose team has over 30 years of combined experience advising private money lenders across all 50 states — including extensive experience with New York lending transactions.