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in Fairfield, CA
Both DSCR and hard money loans ignore your W-2 income, making them popular with Fairfield investors who need fast closes or can't qualify conventionally. The key difference is timeline: DSCR loans work for buy-and-hold rental strategies, while hard money is built for quick flips and rehabs.
Choosing the wrong loan type adds thousands to your costs or creates a mismatch with your exit strategy. If you're holding a rental for income in Fairfield, DSCR wins. If you're renovating and selling within twelve months, hard money makes sense.
DSCR loans qualify you based on rental income divided by mortgage payment. If your Fairfield property generates $3,000 monthly rent and the PITIA payment is $2,500, your DSCR is 1.2. Most lenders want at least 1.0, though some allow 0.75 with stronger profiles.
Terms run fifteen to thirty years with fixed or adjustable rates. You'll pay higher rates than conventional loans—typically 1-2% more—but you avoid tax return scrutiny and income documentation. These work best when you plan to hold the property long-term as a rental.
Fairfield's rental market supports DSCR strategies for single-family homes and small multifamily properties. You can close in three to four weeks, and most programs allow LLC ownership from day one.
Hard money loans fund based on the property's current or after-repair value, not your income or credit score. Lenders care about equity and your exit strategy. If you're buying a Fairfield fixer at $400K with $500K ARV, most hard money lenders loan up to 70-75% of purchase or ARV.
Terms are short—six to twenty-four months—with rates from 9% to 14%. Expect two to four points upfront. Speed is the advantage: you can close in seven to ten days, critical for competitive Fairfield deals or auction purchases.
These loans are designed for flips, heavy rehabs, or bridge financing until you refinance into permanent debt. The high cost makes sense only if you're selling quickly or transitioning to another loan product within a year.
Hard money costs more but closes faster. DSCR loans offer lower rates and longer terms but take three to four weeks to fund. If you're competing for a Fairfield property and need to close in a week, hard money wins. If you're refinancing a rental you already own, DSCR saves money.
DSCR underwriting focuses on rental income sustainability and debt coverage ratio. Hard money underwriting focuses on property value and your experience flipping or managing rehabs. DSCR lenders want appraisals and rent comps; hard money lenders want scope of work and exit timelines.
DSCR programs allow cash-out refinances and rate-and-term refis on existing rentals. Hard money typically requires an acquisition or refinance tied to a clear exit plan. You can't just sit on a hard money loan for years without refinancing—the balloon payment forces action.
Choose DSCR if you're buying or refinancing a Fairfield rental property you plan to hold for years. The rental income covers the mortgage and the amortizing loan builds equity over time. It works for stabilized properties that are already rented or rent-ready.
Choose hard money if you're buying a distressed Fairfield property that needs work before it can rent or sell. Speed matters—auctions, foreclosures, and competitive situations favor hard money. Just make sure your exit is realistic within twelve months, or the balloon payment becomes a problem.
Some Fairfield investors use both: hard money to acquire and renovate, then refinance into a DSCR loan once the property is rent-ready. This strategy maximizes speed upfront and cost efficiency long-term.
Most DSCR lenders require the property to be rent-ready or already rented. Heavy rehabs usually need hard money first, then you can refinance into DSCR after repairs.
You face a balloon payment due in full. Some lenders offer extensions with fees, but rates stay high. Plan your exit before you close the loan.
Some lenders allow it, but many require traditional long-term lease income. Check local Fairfield zoning rules and lender policies before assuming short-term rental income qualifies.
DSCR loans have standard closing costs like conventional loans. Hard money adds two to four points upfront, making it more expensive to close even though the loan is short-term.
Yes. Use DSCR for stabilized rentals and hard money for active rehab projects. Lenders evaluate each property and loan purpose separately.