DSCR vs Hard money
DSCR loans are 30-year amortizing investment-property mortgages priced 7.5-9.5% — used to hold rentals long-term. Hard money is 6-18 month interest-only financing at 9-13% + points — used to acquire + rehab properties for flips or BRRRR rehab phase. They serve different stages of the deal lifecycle: hard money for acquisition + rehab, DSCR for long-term hold.
| DSCR | Hard money | |
|---|---|---|
| Speed to close | DSCR: 21-35 day close. | Hard money: 7-14 day close. |
| Cost | DSCR: 7.5-9.5% rate, no points typical. Long-term amortization spreads cost. | Hard money: 9-13% rate + 1-4 points. Designed for short-term use; expensive if held past 6-12 months. |
| Qualifying | DSCR: property cash flow (DSCR ≥ 1.10-1.25) qualifies the loan. No personal income docs needed. | Hard money: property ARV + borrower experience. Some lenders check FICO; many don't. |
| Best use case | DSCR: long-term rental holds, BRRRR refis, post-flip cash-out, portfolio scaling beyond conventional 10-property cap. | Hard money: flips, BRRRR rehab phase, time-sensitive acquisitions, properties needing repair before they qualify for conventional financing. |
Which to use when.
Use both: hard money to acquire + rehab, DSCR to refinance + hold. Hard money's interest cost eats profit if you hold past the rehab phase; DSCR's slower close + cash-flow underwriting can't handle distressed properties or time-pressure acquisitions.
Frequently asked.
What's the difference between dscr and hard money loans?
DSCR loans are 30-year amortizing investment-property mortgages priced 7.5-9.5% — used to hold rentals long-term. Hard money is 6-18 month interest-only financing at 9-13% + points — used to acquire + rehab properties for flips or BRRRR rehab phase. They serve different stages of the deal lifecycle: hard money for acquisition + rehab, DSCR for long-term hold.
Which is cheaper — dscr or hard money?
DSCR: 7.5-9.5% rate, no points typical. Long-term amortization spreads cost. Hard money: 9-13% rate + 1-4 points. Designed for short-term use; expensive if held past 6-12 months.
Which closes faster?
DSCR: 21-35 day close. Hard money: 7-14 day close.
When should I use dscr vs hard money?
Use both: hard money to acquire + rehab, DSCR to refinance + hold. Hard money's interest cost eats profit if you hold past the rehab phase; DSCR's slower close + cash-flow underwriting can't handle distressed properties or time-pressure acquisitions.
More head-to-head.
The Weekly Deal Memo
One market memo, one off-market playbook, one tool review. Every Friday. Free.
No spam. Unsubscribe anytime.