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in Pomona, CA
Pomona's investor market runs on two types of non-QM financing. DSCR loans qualify you on rental income, while hard money lenders fund based on property value.
Both skip W-2 income checks, but they serve different purposes. DSCR works for buy-and-hold rentals with long-term financing. Hard money funds quick flips and heavy renovations with short-term capital.
Most Pomona investors use hard money to acquire and rehab, then refinance into DSCR for permanent financing. Understanding when to use each loan type determines whether your deal pencils out.
DSCR loans underwrite the property, not your tax returns. Lenders calculate the rental income divided by your mortgage payment. A ratio above 1.0 means the property pays for itself.
Terms run 30 years fixed with rates typically 1-2% above conventional. You need 20-25% down and a 620+ credit score. No income documentation beyond a lease agreement or rent schedule.
These work best for stabilized rentals in Pomona neighborhoods where rent covers the monthly payment. Properties need to be tenant-ready or already occupied. Fixer-uppers don't qualify until rehab is complete.
Hard money lenders fund based on after-repair value, not current condition. They'll lend up to 70% of what the property will be worth after your renovation. Approval happens in days, not weeks.
Terms run 6-24 months with interest-only payments. Rates range from 8-15% plus 2-4 points upfront. Credit matters less than your exit strategy and renovation experience.
Pomona fix-and-flip investors use hard money when properties need major work or when speed matters. These loans bridge the gap between acquisition and either resale or DSCR refinance. They're expensive but fast.
Timeline separates these products. DSCR takes 21-30 days to close with full appraisals and title work. Hard money closes in 5-10 days with minimal documentation and desktop valuations.
Cost structure differs completely. DSCR offers lower rates for long-term holds but requires properties to generate positive cash flow. Hard money costs more monthly but funds deals that don't yet produce income.
Exit strategy determines which loan works. Planning to hold the rental for years? Use DSCR from the start. Buying a distressed property to renovate? Hard money gets you in, then refinance to DSCR once it's stabilized.
Choose DSCR when buying turnkey rentals or recently renovated properties in Pomona. The property needs to be tenant-ready and generate enough rent to cover your payment. This is your long-term hold financing.
Pick hard money for distressed properties, foreclosures, or deals requiring major rehab. Also use it when you need to close fast to win a competitive offer. Just make sure your exit is either a quick resale or a DSCR refinance.
Many successful Pomona investors use both in sequence. Hard money funds the acquisition and renovation. Once the property is stabilized with a tenant in place, they refinance into a DSCR loan for permanent financing at a lower rate.
No, DSCR loans require properties to be tenant-ready and generating rental income. Use hard money for flips, then switch to DSCR if you decide to hold it as a rental.
Hard money closes in 5-10 days versus 21-30 days for DSCR. Speed costs more in points and interest, but it wins competitive deals.
Neither requires W-2 income documentation. DSCR qualifies on rental income from the property. Hard money qualifies on asset value and your exit strategy.
DSCR typically requires 620+ credit. Hard money lenders are more flexible, often approving deals with scores in the 500s if the property value supports it.
Yes, this is a common strategy. Complete your rehab, get a tenant in place, then refinance to DSCR for lower rates and long-term financing.
DSCR costs less over time with lower rates and no points. Hard money costs more but provides short-term capital when properties don't yet qualify for DSCR.