Question 1

Can I use DSCR loans for fix-and-flip projects in Lompoc?

Accepted Answer

No. DSCR loans require stabilized rental income at closing. Use hard money for rehabs, then refinance to DSCR once the property is rent-ready.

Question 2

Which loan type has lower rates?

Accepted Answer

DSCR loans run 1-2 points above conventional rates. Hard money costs 8-12% plus origination points—significantly higher but for much shorter terms.

Question 3

Do either of these loans require tax returns?

Accepted Answer

Neither requires personal tax returns or W-2s. DSCR underwrites to property income. Hard money underwrites to asset value and equity position.

Question 4

How much can I borrow with each loan type?

Accepted Answer

DSCR loans go up to 80% LTV on single-family rentals. Hard money typically caps at 65-75% of after-repair value, depending on the project.

Question 5

Can I refinance hard money into a DSCR loan?

Accepted Answer

Yes, this is a common exit strategy. Once renovations finish and you place tenants, refinance into a DSCR loan for permanent financing.

DSCR Loans vs Hard Money Loans in Lompoc: Which Investor Loan Fits Your Deal?