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in Loomis, CA
Loomis investors face a choice: rent-focused DSCR loans or speed-focused hard money. Both skip traditional income docs, but they serve different timelines and exit plans.
DSCR loans work for buy-and-hold rental strategies with longer terms and lower rates. Hard money fits fix-and-flip projects where you need fast funding and plan to refinance or sell within months.
DSCR loans qualify you based on rental income alone. Your personal W-2, tax returns, and employment history don't matter—only whether the property generates enough rent to cover its mortgage.
Lenders calculate the debt service coverage ratio by dividing monthly rent by the monthly mortgage payment. A ratio above 1.0 means the property pays for itself. Terms run 30 years with rates typically 1-2% above conventional loans.
These loans close in 3-4 weeks and allow multiple properties under one borrower. You can build a portfolio without hitting income documentation walls that stop traditional financing after a few rentals.
Hard money loans fund based on property value, not borrower income or credit. Lenders care about the asset itself and your exit strategy—how you'll pay off the loan within 6-24 months.
These loans close in 7-14 days, sometimes faster. Rates run 8-12% with 2-4 points upfront. You're paying for speed and flexibility, not long-term affordability.
Hard money fits distressed properties that won't qualify for DSCR or conventional loans. Placer County investors use them to grab auction deals or properties needing major rehab before they can appraise at full value.
Timeline separates these products first. DSCR loans take a month to close but offer 30-year terms. Hard money closes in days but expects payoff within two years maximum.
Cost structure differs sharply. DSCR rates sit in the 7-9% range with minimal points. Hard money charges 9-13% plus 3-5 points upfront—expensive short-term financing that only makes sense when speed creates value.
Property condition matters more for hard money. DSCR lenders want rent-ready properties with current tenants or lease-up potential. Hard money funds properties mid-renovation that other lenders won't touch until repairs finish.
Choose DSCR when you're buying a rental property to hold long-term. If you found a turnkey fourplex in Loomis or a single-family rental near Del Oro High, DSCR financing gives you sustainable rates and permanent financing.
Choose hard money when timing matters more than rate. Auction purchases, probate sales, or properties needing major renovation before they qualify for permanent financing—these situations justify hard money's premium cost.
Most sophisticated investors use both. Hard money funds the acquisition and rehab, then they refinance into DSCR once the property stabilizes with rental income. This two-step approach combines speed with long-term affordability.
Yes, this is the standard path for fix-and-flip-to-rental strategies. You need the property rent-ready and ideally occupied or lease-ready before DSCR lenders will refinance you out.
DSCR loans typically require 660+ credit scores. Hard money lenders care less about credit—some approve deals with scores in the 500s if equity and exit strategy are solid.
Yes, both products work throughout Placer County including Loomis. Hard money may have broader property type acceptance for rural or unique properties common in the area.
DSCR loans require 20-25% down typically. Hard money asks for 25-35% down or equity, depending on the property's after-repair value and your experience level.
No, both are investment-only products. DSCR requires rental income for qualification. Hard money prohibits owner occupancy entirely—these are business loans for income properties only.