Side by side
DSCR Loan vs Hard Money Loan
These are different tools for different jobs. Hard money is short-term cash for flips, rehabs, and rapid acquisition. DSCR is long-term, fixed-rate financing for stabilized rentals. Many investors use both — hard money to acquire, DSCR to refinance once stabilized.
| Factor | DSCR | Alternative |
|---|---|---|
| Purpose | Stabilized rental long-term hold | Flip, rehab, bridge acquisition |
| Term | 30-year fixed (or 5/1, 7/1 ARM) | 6-24 months interest-only |
| Rate range | DSCR rates (varies by LTV / FICO) | 9-13% typical |
| LTV (or LTC) | Up to 80% LTV purchase | Up to 90% LTC + 100% rehab |
| Qualifies off | Property cash flow | Property value + ARV + borrower experience |
| Time to fund | 14-30 days | 7-14 days (sometimes 5) |
| Prepay penalty | Optional 1-5 year | None (short term anyway) |
| Income docs | None | None |
| Vesting | Personal or LLC | Usually LLC required |
Bottom line
- Hard money is the right tool for acquisition + rehab. DSCR is the right tool for the long-term hold.
- The classic BRRRR play: hard money to buy + rehab, then DSCR cash-out refinance once stabilized to take chips off the table.
- Hard money rates are 2-3x DSCR rates — only worth it if the deal moves fast enough to absorb the carry cost.
Pick DSCR when
You have a stabilized rental and want long-term, fixed-rate financing.
Pick the alternative when
You are buying a distressed property, need to close in days, or plan to rehab + refinance / flip within 12 months.
Frequently asked
Can I refinance hard money into DSCR?+
Yes - this is one of the most common uses of DSCR. Once your rehabbed property is stabilized and rented, refinance from hard money into a 30-year fixed DSCR loan. We do this constantly.
How fast can DSCR close?+
As fast as 14 days on a clean file with a quick appraisal. 21 days is more typical.
Does DSCR Direct also do hard money?+
Yes - tap the "Have a flip?" button on the homepage for a hard-money quote, or apply for DSCR if your property is already stabilized.
Run your scenario both ways
DSCR Direct shows real-time DSCR pricing. For conventional rates on the same scenario, see ratedirect.net.