Question 1

Can I refinance a hard money loan into a DSCR loan?

Accepted Answer

Yes, that's a common exit strategy. Once renovations finish and the property generates rent, you refinance into a DSCR loan with lower rates and permanent financing.

Question 2

Which loan type has lower closing costs?

Accepted Answer

DSCR loans typically cost less to close. Hard money lenders charge higher origination points—often 2-4 points—because they're taking more risk and moving faster.

Question 3

Do both loans require an appraisal?

Accepted Answer

Yes. DSCR uses standard appraisals. Hard money orders an as-is appraisal plus an after-repair value estimate to determine maximum loan amount.

Question 4

Can I use either loan for a primary residence?

Accepted Answer

No. Both are investment property loans only. DSCR requires rental income documentation, and hard money lenders focus exclusively on non-owner-occupied properties.

Question 5

Which loan is easier to qualify for?

Accepted Answer

Hard money has looser credit requirements—some lenders go down to 580 FICO. But you need a solid exit plan and enough equity in the deal.

DSCR Loans vs Hard Money Loans in Martinez: Which Fits Your Investment Strategy?