Question 1

Can I use a DSCR loan on a property I'm renovating?

Accepted Answer

No. DSCR loans require the property to be rent-ready. Use hard money for rehab, then refinance into DSCR once it's stabilized.

Question 2

What credit score do I need for each loan?

Accepted Answer

DSCR lenders typically want 620 or higher. Hard money lenders focus on property value and may accept lower scores.

Question 3

Which loan closes faster in Lake Forest?

Accepted Answer

Hard money wins on speed — sometimes closing in days. DSCR loans typically take 2–4 weeks to close.

Question 4

Do both loans require a down payment?

Accepted Answer

Yes. DSCR loans usually require 20–25% down. Hard money lenders base leverage on the property's value or ARV.

Question 5

Can I rent out the property with a hard money loan?

Accepted Answer

Technically yes, but it's not practical. Hard money terms are short. You'd need to refinance or sell before maturity.

Question 6

Which loan works better for out-of-state investors buying in Orange County?

Accepted Answer

DSCR is the go-to for out-of-state investors. No personal income docs, no local employer needed — just cash-flowing property.

DSCR Loans vs Hard Money Loans in Lake Forest, CA