Question 1

Can I use DSCR loans for fix-and-flip properties in Madera?

Accepted Answer

No, DSCR loans require rental income to qualify. The property needs a tenant or be rent-ready at closing, which doesn't work for flip projects.

Question 2

What down payment do hard money lenders require in Madera?

Accepted Answer

Most hard money lenders fund 70-80% of purchase price or after-repair value. You'll need 20-30% down plus rehab budget if applicable.

Question 3

Which loan type has lower closing costs?

Accepted Answer

DSCR loans have standard closing costs around 2-3%. Hard money adds 2-4 points upfront, making it significantly more expensive at closing.

Question 4

Can I refinance hard money into a DSCR loan later?

Accepted Answer

Yes, this is a common strategy. Complete your rehab, get a tenant in place, then refinance to DSCR for long-term cash flow.

Question 5

Do both loan types require appraisals?

Accepted Answer

Yes, but hard money often uses broker price opinions for speed. DSCR loans require full appraisals and rent schedule analysis.

Question 6

Which loan works better for Madera's rural properties?

Accepted Answer

DSCR if there are comparable rentals to establish market rent. Hard money is more flexible on unique properties with limited comps.

DSCR Loans vs Hard Money Loans in Madera: Which Investor Loan Fits Your Property Strategy?