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in Vallejo, CA
Vallejo investors face a choice between DSCR loans and hard money loans. Both skip traditional income verification, but they serve completely different strategies.
DSCR loans work for buy-and-hold rentals with stable tenants. Hard money fits flip projects and properties needing major rehab before they qualify for permanent financing.
DSCR loans qualify based on rental income, not your tax returns. Lenders want a debt service coverage ratio above 1.0, meaning rent covers the mortgage payment.
These are 30-year mortgages with rates typically 1-2% above conventional loans. You can finance Vallejo single-families, duplexes, or small multifamily properties.
Expect 20-25% down and decent credit, usually 680 minimum. Closing takes 30-45 days, similar to traditional loans but without employer verification or income docs.
Hard money loans fund fast based on property value, not cash flow. Lenders focus on after-repair value and your exit strategy, approving deals in days instead of weeks.
Terms run 6-24 months with rates between 9-14%. These loans expect you to refinance or sell once the project wraps, not carry them long-term.
Down payments range from 10-30% depending on experience and deal strength. Credit matters less than your track record and the property's profit potential.
DSCR loans cost less but take longer and need a performing rental. Hard money costs more but funds faster and works for properties no bank would touch yet.
DSCR rates sit in the 7-9% range with 30-year amortization. Hard money charges 10-14% with interest-only payments and balloon payoffs.
DSCR lenders require stabilized properties with leases in place. Hard money lenders fund vacant properties, major rehabs, and deals where speed beats price.
Choose DSCR if you're buying a Vallejo rental that's already leased or rent-ready. You'll pay lower rates and hold the property long-term without refinancing pressure.
Pick hard money for flips, major renovations, or time-sensitive deals where you'll sell or refinance within a year. The higher cost buys speed and flexibility.
Many Vallejo investors use both: hard money to acquire and renovate, then refinance into a DSCR loan once the property is stabilized and generating rent.
No, DSCR loans require stabilized rental income. Hard money is the right tool for flips since it funds based on after-repair value, not current rent.
DSCR loans typically have lower fees, around 1-2% of loan amount. Hard money lenders charge 2-5 points plus higher rates to offset short-term risk.
No, hard money ignores income entirely. Lenders focus on property value, your equity stake, and a clear exit strategy to repay the loan.
Yes, this is common. Complete your rehab, get tenants placed, then refinance into a DSCR loan for long-term hold at a lower rate.
Hard money approves in 3-7 days versus 30-45 days for DSCR. Speed matters when competing for properties or managing construction timelines.