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in Kerman, CA
Kerman investors face a choice between two non-QM financing paths that ignore W-2 income. DSCR loans use rental cash flow to qualify, while hard money lenders care only about the property's value and your exit plan.
Both bypass traditional underwriting, but they serve different strategies. DSCR works for buy-and-hold rental investors who want long-term financing. Hard money funds quick flips and rehabs with short repayment windows.
DSCR loans qualify you on rental income alone—no tax returns, no pay stubs. The property must generate enough rent to cover the mortgage payment, typically a 1.0 to 1.25 ratio. Rates run 1-2% above conventional, with 15-30 year terms.
These work for Kerman investors building a rental portfolio. You get stable monthly payments and can refinance into conventional later. Expect 20-25% down and credit scores above 620 for best pricing.
Hard money lenders fund based on after-repair value, not current condition. They'll lend 65-75% of ARV, closing in 7-14 days with minimal paperwork. Rates start at 9-12% with 2-4 point origination fees, and terms max out at 12-24 months.
This is bridge financing for fix-and-flip projects or time-sensitive acquisitions. Kerman properties needing heavy rehab or facing foreclosure fit this profile. You pay for speed and flexibility, not low rates.
DSCR gives you 30-year amortization at 7-9% with lower fees. Hard money runs 9-12% interest-only for 12 months with hefty points. DSCR takes 30-45 days to close; hard money funds in under two weeks.
Qualification differs completely. DSCR underwriters analyze rent rolls and debt coverage ratios. Hard money lenders care about property value, equity cushion, and your renovation budget. Credit matters more for DSCR—hard money accepts scores in the 500s if the deal works.
Choose DSCR if you're acquiring a Kerman rental property you plan to hold for years. The property should already generate market rent or need only cosmetic work. You want predictable payments and eventual refinance options.
Pick hard money if you're flipping a distressed Kerman property or need to close before another buyer. You have a clear exit—either resale or refinance into permanent financing within 12 months. Speed matters more than rate, and you can handle the short runway.
Not until it's rent-ready. DSCR lenders require proof of current or projected rental income, which means the property must be habitable and marketable to tenants.
Most hard money lenders want 25-35% equity in the deal. They'll lend 65-75% of the after-repair value, so your down payment plus renovation budget must cover the gap.
DSCR has lower upfront costs—typically 1-2 points versus 2-4 points for hard money. But hard money skips appraisal contingencies and income verification, saving time.
Yes, that's a common exit strategy. Once your Kerman flip is stabilized and rented, you refinance into a DSCR loan for long-term holding.
No. DSCR qualifies on rental income alone, and hard money lenders care only about property value and your renovation plan.