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in Sunnyvale, CA
Sunnyvale real estate investors have two powerful financing options that skip traditional income verification. DSCR loans and hard money loans both serve investors, but they work in fundamentally different ways.
Understanding which loan type matches your investment strategy can save you thousands of dollars and months of time. Each product has specific strengths that align with different real estate scenarios in Santa Clara County.
DSCR loans qualify you based on your rental property's income, not your W-2 or tax returns. The lender calculates whether the rent covers the mortgage payment, typically requiring a ratio above 1.0.
These loans offer 30-year terms with rates comparable to conventional financing. You can secure properties in Sunnyvale for long-term holds without proving personal income through traditional documentation.
Down payments typically start at 20-25% for investment properties. DSCR loans work well for established rental properties generating consistent income or properties with strong rental potential.
Hard money loans focus on the property's current or after-repair value rather than income or credit. Lenders approve based on the asset itself, making these loans extremely fast to fund.
These short-term loans typically last 6-24 months with higher interest rates than DSCR products. Hard money excels when speed matters more than monthly payment, such as competitive bidding situations or time-sensitive renovations.
Expect to pay points upfront and higher rates during the loan term. Hard money lenders in Sunnyvale can close in days rather than weeks, giving investors an edge in fast-moving situations.
Timeline separates these products most dramatically. DSCR loans take 21-30 days to close, while hard money can fund in 5-10 days. Cost structure differs significantly too—DSCR offers lower rates for longer terms, while hard money charges premium rates for short-term flexibility.
Your exit strategy determines which product makes sense. DSCR loans suit buy-and-hold investors planning to keep properties as rentals. Hard money serves fix-and-flip investors or those needing bridge financing before permanent loans.
Rates vary by borrower profile and market conditions. DSCR loans in Santa Clara County typically run 1-2% above conventional rates. Hard money loans commonly charge 9-14% plus 2-4 points upfront.
Choose DSCR loans when buying turnkey rentals or properties you plan to hold long-term in Sunnyvale. The lower rates and 30-year terms keep monthly payments manageable while building equity over time.
Hard money makes sense for acquisitions requiring quick closes or properties needing substantial renovation. If you're competing against cash buyers or planning a 6-month flip, hard money's speed justifies its premium cost.
Many Sunnyvale investors use both strategically. They acquire with hard money, complete renovations, then refinance into DSCR loans for permanent financing. This approach maximizes speed during acquisition and minimizes costs during the hold period.
Yes, this is a common strategy. Complete your renovations with hard money, establish rental income, then refinance into a DSCR loan for better long-term rates and terms.
DSCR loans typically require 620+ credit scores. Hard money lenders focus more on the property value and may approve borrowers with lower scores or recent credit issues.
Most lenders want rental income to equal or exceed the mortgage payment. A DSCR of 1.0 or higher is standard, though some programs accept ratios as low as 0.75 with larger down payments.
When speed prevents you from missing an opportunity, yes. The higher cost pays for itself if the alternative is losing a property to a faster buyer in this competitive market.
DSCR loans work best for rent-ready properties. For major renovations, hard money handles the construction phase, then you can switch to DSCR once the property generates rental income.