Loading
in Atherton, CA
Atherton investors face a choice between two non-QM options: DSCR loans for rental income plays and hard money for quick acquisitions. Each serves a different timeline and strategy.
DSCR loans qualify you based on what the property earns, not your W-2. Hard money gets you to close in days but costs more. Your choice hinges on whether you need speed or sustainable financing.
DSCR loans underwrite the property, not you. Lenders calculate rent divided by mortgage payment. A ratio above 1.0 means the property covers itself. You need 15-25% down and credit above 640.
Terms run 30 years with rates 1-2% above conventional. No income docs required. Perfect for investors with strong rental portfolios but complex tax returns. Rates vary by borrower profile and market conditions.
Hard money lenders fund based on property value, not your financials. They'll lend 65-75% of after-repair value. You close in 5-10 days. Terms run 6-24 months with rates from 9-15%.
Expect 2-5 points at closing. No income verification. No credit score minimums at most lenders. Use it for fix-and-flip projects or bridge financing until long-term loans become available.
DSCR offers long-term holds at lower rates. Hard money trades speed for cost. DSCR needs solid rental income and stable credit. Hard money just needs equity in the deal.
DSCR closes in 30-45 days with full appraisals and title work. Hard money skips most underwriting and funds fast. Chicago Fed forecasts suggest rate cuts later in 2026, which could make DSCR rates more competitive for rental holds.
Choose DSCR if you're buying a turnkey rental in Atherton and plan to hold long-term. The lower rate saves thousands monthly. Choose hard money if you're competing in a bidding war or need to close before a foreclosure auction.
Most sophisticated investors use both. Hard money gets you in the door. DSCR refinances you into sustainable terms after renovation. We structure the hard money loan knowing you'll convert to DSCR within 12 months.
Yes. Lenders use market rents from an appraisal to calculate your DSCR. They don't need actual lease agreements if the property is vacant or newly purchased.
Most hard money lenders offer extensions for a fee, typically 1-2 points. Plan your exit before you borrow. If the project stalls, you risk foreclosure.
Yes. Expect to show 6-12 months of mortgage payments in liquid reserves. Some lenders waive this for strong DSCR ratios above 1.25.
No. Hard money is for investment properties only. Lenders won't fund owner-occupied deals with these terms. You'd need a different loan type.
DSCR works if rents justify the purchase price. Hard money helps when you need speed or the property needs work before it qualifies for traditional financing.