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in Petaluma, CA
Petaluma investors typically choose between DSCR loans and hard money based on their timeline. DSCR works for stable rental properties you plan to hold long-term.
Hard money fits fast acquisitions and fix-and-flip projects. Both skip traditional income verification, but they serve completely different investment plays in Sonoma County.
DSCR loans qualify you based on the property's rental income, not your tax returns. Lenders calculate the rent divided by the mortgage payment—typically need 1.0 or higher to qualify.
You get 30-year fixed rates like conventional loans, usually 1-2% higher. These work well for Petaluma multi-family properties or single-family rentals you'll keep for years.
Most DSCR lenders want 20-25% down and credit scores around 640. You can close in 3-4 weeks, which beats conventional investor loans that scrutinize your entire financial history.
Hard money lenders care about the property's value, not your income or credit. They'll fund distressed properties that banks won't touch, often in 7-10 days.
Expect 8-12% interest rates and 2-4 points upfront. Terms run 6-24 months because these are bridge loans—you're supposed to refinance or sell once renovations finish.
You can borrow up to 70-75% of purchase price or after-repair value. This structure works for Petaluma fixer-uppers where you need capital fast and plan to exit quickly.
Cost separates these loans immediately. DSCR rates match investor conventional loans—think 7-8% range. Hard money costs double that, plus hefty points you pay at closing.
Timeline matters just as much. DSCR takes a month and requires appraisals, title work, full underwriting. Hard money can fund in a week because lenders only evaluate the property.
Your exit strategy determines which loan makes sense. DSCR borrowers plan to collect rent for years and refinance when rates drop. Hard money borrowers flip properties or refinance within 12 months.
Choose DSCR if you're buying a rental property in Petaluma that's already rent-ready or needs minor cosmetic work. The lower rates save thousands monthly compared to hard money.
Pick hard money when you're competing against cash buyers on distressed properties. That speed lets you close before other investors even get loan approval.
Most sophisticated investors use both. They acquire with hard money, complete renovations in 6 months, then refinance into DSCR loans for long-term cash flow. Rates vary by borrower profile and market conditions.
DSCR lenders won't fund major renovations—they need current rental income to qualify you. Use hard money for rehab projects, then refinance to DSCR once tenants move in.
Most hard money lenders accept 580+ credit or don't check scores at all. They care about your equity and exit strategy, not your credit history.
DSCR loans dominate multi-family financing because rental income easily covers payments. Hard money only makes sense if you're converting a distressed duplex or fourplex.
On a $500K loan, hard money costs roughly $4,000/month plus $15K in points. DSCR runs about $3,000/month with minimal points—massive difference over 12 months.
Yes. DSCR qualifies on rental income and hard money on property value. Neither requires tax returns or employment verification for approval.