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in Santa Clarita, CA
Santa Clarita investors face a choice between two non-QM financing paths. DSCR loans use rental income to qualify, while hard money lenders care only about the property itself.
Both skip W-2 verification and move faster than conventional loans. But they serve different strategies and timelines in this competitive market.
DSCR loans qualify you based on rental income covering the mortgage payment. If the property generates enough rent to exceed the debt payment, you can qualify without tax returns or pay stubs.
Terms run 30 years with fixed or adjustable rates. You'll typically need 20-25% down and a credit score above 620. Rates run higher than conventional but lower than hard money.
This works for buy-and-hold investors who want stable long-term financing. The property needs to be rent-ready or already generating income at closing.
Hard money loans fund based on the property's value and equity position. Lenders don't care about your income, credit score, or the rent it generates. They care about exit strategy and loan-to-value.
Terms run 6-24 months with interest-only payments. Expect rates of 9-14% and points of 2-4% upfront. You'll need 25-35% down depending on the deal.
These loans close in days, not weeks. Investors use them for fix-and-flips, bridge financing, or properties needing heavy renovation before they can qualify for DSCR or conventional loans.
Local decision guide
Use this comparison to weigh DSCR Loans and Hard Money Loans through local payment fit, eligibility, documentation, and timing before choosing a path in Santa Clarita.
Santa Clarita investors face a choice between two non-QM financing paths. DSCR loans use rental income to qualify, while hard money lenders care only about the property itself.
Both skip W-2 verification and move faster than conventional loans. But they serve different strategies and timelines in this competitive market.
DSCR loans qualify you based on rental income covering the mortgage payment. If the property generates enough rent to exceed the debt payment, you can qualify without tax returns or pay stubs.
Timeline separates these options first. Hard money closes in a week when you need to move fast on a deal. DSCR takes 3-4 weeks but costs significantly less over time.
Property condition matters differently. DSCR requires rent-ready properties with stable income. Hard money funds distressed properties that need work before they can generate rent or qualify for traditional financing.
Cost structure flips the equation. DSCR has lower rates but stricter underwriting on the rental income calculation. Hard money costs more but approves deals DSCR lenders won't touch.
Choose DSCR for turnkey rentals or properties needing minor cosmetic work. If you're buying a Santa Clarita single-family that can rent immediately, DSCR gives you 30-year fixed financing without income verification.
Choose hard money when speed matters or the property needs serious work. Winning a competitive offer, funding a flip, or buying a property that won't appraise for traditional financing all point to hard money.
Many investors use both strategically. Hard money funds the acquisition and renovation, then they refinance into a DSCR loan once the property is rent-ready and stabilized.
Yes, this is a common strategy. Once renovations are done and the property generates rent, you refinance into a DSCR loan with better terms and longer amortization.
DSCR loans have significantly lower rates, typically 3-5% below hard money rates. Hard money trades higher cost for speed and flexibility on property condition.
Yes, but DSCR handles 2-4 units better for long-term holds. Hard money works for any property type but makes more sense for short-term value-add plays.
Hard money closes in 5-10 days versus 3-4 weeks for DSCR. When you're competing against cash buyers, hard money can make your offer as strong as cash.
Hard money rarely checks credit. DSCR typically requires 620+ credit score, though some lenders go lower with larger down payments or strong rental income ratios.