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in Ione, CA
Ione's small-town rental market attracts investors who need flexible financing outside conventional channels. DSCR loans and hard money loans both skip personal income verification, but they serve different investment strategies.
DSCR loans work for cash-flowing rentals you plan to hold long-term. Hard money fits quick flips and properties needing major rehab before they can qualify for permanent financing.
DSCR loans qualify you based on rental income divided by the mortgage payment. If the property generates $2,000 monthly rent and the payment is $1,600, your ratio is 1.25.
Most lenders want ratios above 1.0, meaning the rent covers the full payment. These loans typically run 30 years at rates 1-2% above conventional mortgages, with 20-25% down required.
You don't provide tax returns or pay stubs. The property income is what matters. This works well for self-employed investors or those with complex tax situations who own profitable rentals.
Hard money loans fund based on property value, not your financials or the property's current condition. Lenders care about after-repair value and your exit strategy.
Terms run 6-24 months with rates from 8-15%. Points range from 2-5% of the loan amount. You typically borrow 65-75% of the purchase price or ARV, whichever is lower.
These loans close fast, often in 5-10 days. You use them to buy distressed properties, complete renovations, then refinance into permanent financing or sell the property.
The timeline separates these loans completely. DSCR loans are permanent financing you keep for years. Hard money is bridge financing you replace within months.
DSCR loans require rent-ready properties generating immediate income. Hard money funds properties that don't qualify for anything else yet—distressed homes, major rehabs, or properties you just bought at auction.
Cost differs dramatically. DSCR rates currently sit around 7-8.5% with minimal points. Hard money costs 10-15% plus 3-5 points upfront, but you only carry that cost for months, not decades.
Choose DSCR if you're buying a turnkey rental or a property needing only minor cosmetic work. The property should be habitable and able to generate rent within 30-60 days of closing.
Choose hard money if the property needs major rehab, won't appraise in current condition, or you're buying at a steep discount and flipping it. Also use it when speed matters more than rate—like beating competing offers with a quick close.
Many Ione investors use both in sequence. They buy a fixer with hard money, complete renovations in 4-6 months, then refinance into a DSCR loan for permanent financing. This strategy maximizes leverage while minimizing high-rate carrying costs.
Minor work is fine, but the property must be habitable and generate rent immediately. Major rehabs need hard money first, then refinance to DSCR after repairs.
Hard money closes in 5-10 days. DSCR loans typically take 30-45 days since they require appraisals and full underwriting despite skipping income docs.
DSCR loans want 680+ credit scores. Hard money lenders accept 600+ or sometimes lower since they focus on property value, not borrower profile.
You can but shouldn't. Rates of 10-15% kill cash flow on rentals. Use hard money temporarily, then refinance to DSCR or conventional within 12 months.
Yes. Both DSCR and hard money lenders fund non-owner-occupied investment properties regardless of where you live. Neither requires California residency.