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in Suisun City, CA
Both DSCR and hard money loans ignore your W-2 income, but they serve completely different purposes. DSCR loans work for cash-flowing rentals you plan to hold. Hard money funds quick flips or major rehabs when speed matters more than rate.
Most Suisun City investors use hard money to acquire distressed properties, then refinance into DSCR loans once the property is rent-ready. Understanding when to use each option determines whether your deal pencils out or bleeds cash.
DSCR loans qualify you based on the property's rental income divided by its debt payments. Lenders want a ratio above 1.0, meaning rent covers the mortgage plus taxes and insurance. You don't need tax returns or pay stubs.
Terms run 30 years with rates typically 1-2% above conventional mortgages. Most lenders require 20-25% down and credit scores around 660. These work for stabilized rentals generating consistent income, not fix-and-flip projects.
Hard money lenders fund based on property value, not your financials. They focus on the asset and your exit strategy. Approval takes days, not weeks. Rates run 9-14% with 2-4 points upfront.
Terms last 6-24 months because these are bridge loans, not permanent financing. Lenders typically fund 65-75% of purchase price or after-repair value. You need a clear plan to either sell or refinance before the term ends.
DSCR loans cost less but take longer to close and require performing assets. Hard money costs more but funds distressed properties in days. DSCR needs tenant leases and stable income. Hard money doesn't care if the property is vacant or needs work.
DSCR requires standard appraisals and title work. Hard money often skips those for speed. Your credit matters for DSCR but barely registers for hard money. DSCR gives you decades to repay. Hard money gives you months to execute your plan.
Use hard money when you're buying a distressed Suisun City property that needs major work or you're competing with cash buyers. Use DSCR when you're acquiring a rent-ready property or refinancing after a flip is complete.
Most successful investors layer both products. Hard money funds the acquisition and renovation. DSCR refinances the property once it's stabilized and rented. This sequence keeps your capital efficient and minimizes the time you're paying double-digit rates.
Yes, this is the most common exit strategy. Once your property is renovated and rented, DSCR lenders will refinance based on the new rental income and stabilized value.
Hard money closes in 3-7 days. DSCR loans take 21-30 days because they require full appraisals, title work, and underwriting based on rental income documentation.
Neither requires W-2s or tax returns. DSCR qualifies on property income. Hard money qualifies on asset value and your exit plan.
DSCR lenders typically want 660+ credit. Hard money lenders often approve borrowers with scores below 600 if the deal and collateral are strong.
No. Both are investor products for non-owner-occupied properties only. You need conventional or FHA financing for homes you plan to live in.