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in Azusa, CA
Azusa investors face a choice between two non-QM financing paths. DSCR loans underwrite to rental income, while hard money lenders focus on the property itself.
Both skip traditional income verification. But they serve different investment strategies and timelines in this Los Angeles County market.
DSCR loans qualify you on one number: monthly rent divided by monthly debt. You need a ratio above 1.0, meaning rent covers the mortgage payment.
Terms run 30 years with rates currently in the 7-9% range. Lenders want 20-25% down and a 620+ credit score. No tax returns, no pay stubs.
This works for Azusa rental properties that cash flow from day one. You're buying to hold, not flip, so the conventional loan structure makes sense.
Hard money lenders fund based on after-repair value, not current condition. They'll lend on properties other banks won't touch—distressed homes, major renovations, quick closings.
Expect 10-14% rates on 6-12 month terms. Points run 2-4% upfront. LTV caps at 65-75% of ARV, so you need skin in the game.
This is bridge financing for Azusa fix-and-flips or projects needing fast closes. You're paying for speed and flexibility, not long-term affordability.
Rate spread tells the story: DSCR at 8% vs hard money at 12% costs you $400/month per $100K borrowed. But DSCR takes 30 days to close while hard money funds in a week.
DSCR wants stabilized rentals generating cash flow today. Hard money doesn't care about current condition—they're betting on your exit strategy.
Credit matters more for DSCR. Hard money will fund 580 scores if the deal works. But you're refinancing out of hard money within a year, so bad credit costs you twice.
Choose DSCR if you're buying a turnkey Azusa rental that cash flows immediately. The lower rate saves thousands monthly, and you're not racing a maturity date.
Pick hard money for distressed properties needing work, competitive offers requiring fast closes, or projects where 30 days kills the deal. You'll refinance to DSCR once renovations finish.
Some Azusa investors use both: hard money to acquire and renovate, then refinance into DSCR to hold long-term. That's the cleanest path from fixer to cash-flowing rental.
No. DSCR lenders require rent-ready condition and an active lease or market rent appraisal. Finish renovations first or use hard money to fund the work.
DSCR at 8% costs $3,670/month. Hard money at 12% costs $5,140/month—a $1,470 difference. Plus hard money charges 2-4 points upfront, adding $10-20K in fees.
Most will fund 580+ scores if the deal pencils. But low credit increases rates and points. Expect 1-2% higher rates below 620.
DSCR loans close in 25-35 days. Hard money funds in 7-14 days, sometimes faster with clear title and strong equity position.
Yes. Once renovations finish and the property's rented, you refinance into DSCR. This is standard for fix-and-hold investors buying distressed Azusa properties.