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in Fort Bragg, CA
Fort Bragg's vacation rental and investment property market demands financing that moves fast and qualifies on different terms than conventional loans. Both DSCR and hard money loans skip the W-2 income requirements that stop most investor deals.
DSCR loans work for rental properties that generate enough income to cover the mortgage. Hard money loans fund based on the property's value, ignoring income entirely and closing in days instead of weeks.
DSCR loans qualify you based on whether the property's rental income covers the mortgage payment. Lenders want a ratio of 1.0 or higher—meaning rent equals or exceeds your monthly debt service.
These loans work for established rentals or properties with clear rental comps. Expect 20-25% down, rates currently in the 7-9% range, and 30-year terms. Fort Bragg vacation rentals with strong seasonal income often qualify if you can document bookings or use market rent data.
Closing takes 3-4 weeks. You need an appraisal and rental income analysis, but no tax returns or pay stubs. Credit scores typically start at 660, though some lenders go lower for stronger properties.
Hard money loans fund based on the property's after-repair value, not your income or credit. Lenders care about the deal—what you paid, what it'll be worth, and your exit strategy.
These are short-term tools: 6-24 month terms, rates from 9-14%, and points upfront. You'll put down 10-30% depending on the deal structure. Hard money shines for fix-and-flip projects, distressed properties, or when you need funding in 5-10 days.
Fort Bragg fixer-uppers near the coast are classic hard money candidates. Lenders focus on property condition and marketability, not FICO scores. Expect to pay 2-5 points at closing plus higher monthly payments.
Timeline separates these loans immediately. DSCR takes 3-4 weeks and requires appraisals and rent analysis. Hard money closes in days with minimal paperwork if the deal makes sense.
Cost structure differs completely. DSCR loans have lower rates but standard closing costs and long-term commitments. Hard money charges higher rates plus 2-5 points upfront, but you're only paying for months, not years.
Purpose matters most. DSCR finances properties you plan to hold and rent. Hard money bridges you to a sale or refinance. One is buy-and-hold financing, the other is a short-term acquisition tool.
Choose DSCR if you're buying a Fort Bragg rental property to hold long-term. Vacation rentals, coastal homes with tenant history, or properties with clear rental comps all work. You want the lower rate and long-term stability.
Pick hard money when speed matters or the property won't qualify anywhere else. Buying a distressed home to renovate and flip? Need to close before another buyer? Property needs too much work for traditional appraisal? Hard money solves those problems.
Some investors use both: hard money to acquire and renovate, then refinance into a DSCR loan once the property is rent-ready. That strategy maximizes speed on the buy and cost efficiency on the hold.
Yes, if you can document rental income through bookings or comparable market rents. Lenders need proof the property generates enough to cover the mortgage payment.
Most hard money lenders close in 5-10 days once they approve the deal. Some can fund in 3 days for simple transactions with clear equity.
DSCR loans typically require 660+ credit. Hard money lenders care more about the property deal than your FICO score.
DSCR costs less if you're holding the property. Hard money's high rates and points make it expensive beyond 12-18 months.
That's the most common use case. Hard money lenders fund based on after-repair value, covering both purchase and rehab costs.