Question 1

Can I use DSCR loans for short-term rentals in Foster City?

Accepted Answer

Most DSCR lenders allow short-term rental income if you provide booking history or market rent analysis. Some require 12 months of operating history before they'll count Airbnb income.

Question 2

How much cash do I need for hard money versus DSCR?

Accepted Answer

Hard money typically requires 25-35% down plus rehab reserves. DSCR loans need 20-25% down but no construction holdback, assuming you're buying a rental-ready property.

Question 3

Do either of these loans work for owner-occupied properties?

Accepted Answer

No. Both are investment property loans only. If you plan to live in the property, you need a conventional or FHA loan instead.

Question 4

Which loan type offers better prepayment flexibility?

Accepted Answer

Hard money rarely has prepayment penalties since early payoff is expected. DSCR loans often carry 1-3 year prepayment penalties, though terms vary by lender.

Question 5

Can I get either loan with an LLC instead of personal name?

Accepted Answer

Yes. Both DSCR and hard money lenders commonly close in LLC or trust names. You'll still personally guarantee the loan in most cases.

DSCR Loans vs Hard Money Loans in Foster City: Which Fits Your Investment Strategy?