Question 1

Can I use DSCR loans for properties that need renovation?

Accepted Answer

Not usually. DSCR lenders want rent-ready properties with existing tenants or market-rate rental comps. Major rehabs need hard money first.

Question 2

What credit score do I need for hard money loans?

Accepted Answer

Most hard money lenders accept 580+ credit or don't check credit at all. They care more about your equity and exit strategy.

Question 3

How much does hard money cost compared to DSCR?

Accepted Answer

Hard money runs 9-14% with 2-4 points in fees. DSCR runs 7-9% with standard closing costs. Over 12 months, hard money costs roughly double.

Question 4

Can I convert a hard money loan to a DSCR loan?

Accepted Answer

You refinance, not convert. Once the property is renovated and rented, you apply for a DSCR loan to pay off the hard money.

Question 5

Do both loan types work for vacation rentals in Clearlake?

Accepted Answer

DSCR lenders increasingly accept short-term rental income with proper documentation. Hard money works regardless of rental strategy since it's asset-based.

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