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in Vacaville, CA
Vacaville investors usually need one of two loan types: DSCR for buy-and-hold rentals or hard money for fix-and-flip deals. Both skip traditional income verification, but they serve completely different timelines and strategies.
DSCR loans fund properties that already generate rent and close in 2-3 weeks. Hard money loans fund acquisitions and renovations with 7-10 day closings but cost significantly more.
DSCR loans qualify you based on the property's rental income, not your personal income. If the rent covers 100-125% of the mortgage payment, you get approved regardless of your tax returns or employment.
Rates currently run 7.5-9.5% with 20-25% down for most Vacaville rental properties. These are 30-year fixed loans designed for long-term holds, with no prepayment penalties after six months.
Hard money loans fund based on the property's after-repair value, not current condition. Lenders typically advance 70-80% of ARV, covering both purchase and renovation costs for fix-and-flip projects.
Rates range from 9-14% with 2-4 points upfront. Terms run 6-18 months with interest-only payments, designed to be paid off when you sell or refinance the completed property.
Cost separates these loans more than anything else. DSCR rates cost 2-4% more than conventional loans, while hard money costs 4-7% more plus significant points upfront.
Timeline matters just as much. Hard money closes in a week for distressed properties and foreclosure auctions. DSCR takes 2-3 weeks and requires the property to be rent-ready with existing or projected tenant income.
Choose DSCR if you're buying a turnkey rental or a property with a tenant already in place. The lower rates and 30-year term mean you can hold long-term and build equity through appreciation and rent growth.
Choose hard money if you're buying a distressed Vacaville property at auction, competing with cash buyers, or planning a 4-6 month renovation. You need a clear exit strategy—either a sale or refinance into DSCR or conventional financing once the work is done.
No. DSCR lenders require rent-ready condition and existing or projected tenant income. Distressed properties need hard money first, then you can refinance into DSCR after stabilization.
Hard money closes in 7-10 days. DSCR takes 2-3 weeks because lenders order appraisals and verify rental comps, even though they don't check your personal income.
No. DSCR needs 20-25% down on purchase price. Hard money advances 70-80% of after-repair value, which might cover your entire purchase if you're buying below market.
Yes, most investors do exactly that. Complete the renovation, place a tenant, then refinance into a 30-year DSCR loan to lock in lower rates and long-term cash flow.
DSCR works for stabilized rentals you plan to hold. Hard money only makes sense if you're buying distressed and need the speed, then refinancing out within a year.