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in San Fernando, CA
San Fernando investors face a clear choice: qualify on rental income with a DSCR loan or close fast with hard money. Both bypass W-2 verification, but they serve completely different strategies.
DSCR loans work for cash-flowing rentals you plan to hold. Hard money fits fix-and-flip projects or distressed properties that won't qualify elsewhere.
DSCR loans qualify you based on the property's rental income divided by the mortgage payment. You need a ratio above 1.0 — meaning rent covers the loan. No tax returns or pay stubs required.
These are long-term loans with 30-year fixed options. Rates run 1-2% higher than conventional, but you get investor financing without proving personal income. Minimum credit score is typically 620.
Hard money lenders fund based on the property's after-repair value, not your financials. They close in days, not weeks. You pay for speed with rates between 9-14% and terms of 6-24 months.
These loans cover distressed properties, heavy rehabs, or time-sensitive deals. Lenders care about your exit strategy — will you refinance or sell? Expect 2-4 points in origination fees on top of higher rates.
DSCR loans require properties that already generate rent or could rent immediately. Hard money funds properties in any condition, even uninhabitable. DSCR loans take 30-45 days to close; hard money closes in under two weeks.
Cost structure splits them further. DSCR rates run 7-9% with 30-year amortization. Hard money hits 9-14% with balloon payments due in 1-2 years. DSCR builds long-term portfolio; hard money solves short-term problems.
Choose DSCR if you're buying a turnkey rental or a property that needs minor cosmetic work. You want stable financing for a property you'll hold for years. The lower rate and long-term structure match a buy-and-hold strategy.
Pick hard money for flips, major rehabs, or competitive cash offers in San Fernando. You need speed to close or the property won't qualify for traditional financing yet. Plan your refinance or sale exit before you sign.
Only minor cosmetic work. The property must be rent-ready at closing since lenders base approval on current rental income potential.
DSCR loans require 20-25% down. Hard money lenders typically want 10-20% down but focus more on equity after repairs.
Yes, this is a common exit strategy. Once renovations finish and the property generates rent, you refinance into long-term DSCR financing.
Hard money cares less about credit scores, sometimes funding below 600. DSCR loans typically require 620+ credit for approval.
Yes. DSCR loans fund 2-4 units easily. Hard money funds any property type but prices deals based on complexity.