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in Amador City, CA
Amador City investors face a choice between DSCR loans and hard money financing. Both bypass traditional income verification, but they serve different purposes and timelines.
DSCR loans work for cash-flowing rentals you plan to hold. Hard money fits quick flips or properties needing major rehab before they qualify for permanent financing.
DSCR loans qualify you based on rental income, not your tax returns. Lenders want a debt service coverage ratio of 1.0 or higher—meaning rent covers the mortgage payment.
These are long-term loans with 30-year terms and rates typically 1-2% above conventional mortgages. You can close in 2-3 weeks and hold the property indefinitely.
Most lenders require 20-25% down and credit scores above 620. The property must be investment-only—no owner-occupied units qualify for DSCR financing.
Hard money loans fund based on property value, not income or credit. Lenders care about the asset and your exit strategy—how you'll pay them back in 6-24 months.
Expect rates between 8-15% with 2-5 points upfront. These loans close in days, not weeks, which matters when competing for distressed properties in small markets.
Most hard money lenders fund up to 65-75% of purchase price or after-repair value. You need skin in the game and a clear plan to refinance or sell.
The rate gap is dramatic. DSCR loans run 7-9% while hard money hits 10-15%. Hard money also charges 2-5 points upfront, adding thousands to your cost.
Timeline matters more than rate for some deals. Hard money closes in 3-7 days. DSCR takes 2-3 weeks, which can cost you the property in competitive situations.
DSCR loans require rent rolls and lease agreements. Hard money lenders want repair estimates and comps showing after-repair value—completely different documentation.
Exit strategy differs entirely. DSCR loans are permanent financing you can hold for decades. Hard money is bridge financing—you must refinance or sell within 12-24 months.
Choose DSCR when buying a turnkey rental that already generates income. The property needs tenants in place or strong rental comps to prove it can cover the mortgage.
Pick hard money for properties that won't qualify for traditional financing yet. This includes major fixer-uppers, foreclosures, or deals requiring speed to close.
In Amador City's historic district, hard money often makes sense for acquiring properties needing significant restoration. Once renovated, refinance into a DSCR loan for long-term holding.
Yes, this is common for fix-and-flip investors who decide to hold. Once renovated and rented, the property qualifies for DSCR refinancing at lower rates.
DSCR costs less over time due to lower rates and no points. Hard money charges more but only for 6-24 months, making short-term projects viable.
Yes. Neither requires you to live in California. Both focus on the property, not your residency or employment location.
Hard money works with credit scores below 600. DSCR lenders typically want 620+ and will price based on your score.
Hard money closes in 3-7 days. DSCR takes 2-3 weeks for underwriting and appraisal, even in small markets.