Loan Comparison
DSCR vs Hard Money Loan
Two very different products for two different stages of an investor’s deal. Hard money buys speed and rehab capital; DSCR holds the stabilized rental for the long haul.
Side-by-side: DSCR vs Hard Money
| Factor | DSCR Loan | Hard Money Loan |
|---|---|---|
| Loan purpose | Long-term hold of a stabilized rental | Short-term purchase, rehab, or bridge |
| Term length | 15-, 30-, or 40-year fixed (or 5/6, 7/6, 10/6 ARM) | 6-18 months typical |
| Rate (typical, 2026) | Investor-grade fixed rate (low-to-mid 7s) | 8-14%+ interest-only |
| Points / origination | Standard mortgage origination (typically 1-2 pts) | 2-5 points up front |
| Maximum LTV / leverage | Up to 80% of appraised value | 65-75% of ARV (After Repair Value) |
| Rehab funding | Not included — property must be rent-ready | Bundled — rehab draws funded against scope |
| Income documentation | None — property's rental income qualifies | Light credit check; primarily asset-based |
| Minimum credit score | 640 | 600-680 typical (varies by lender) |
| Closing timeline | 15-21 days | 3-10 days |
| Prepayment penalty | Standard PPP (often 5/4/3/2/1 or step-down) | Usually none — designed for fast exit |
| Exit strategy | Hold and cash flow indefinitely | Sell, or refinance into DSCR / conventional |
Choose DSCR if…
- The property is stabilized, rent-ready, and cash-flowing
- You're refinancing out of hard money after the rehab is complete (BRRRR refi)
- You want a 30-year fixed rate locked in for long-term hold
- You need to pull cash out for the next acquisition
- You want to vest in an LLC and scale without DTI caps
- You can wait 15-21 days for the right rate and term
Choose Hard Money if…
- You're buying a distressed property that won't pass a standard appraisal
- You need rehab capital bundled into the loan
- Your closing window is 7-10 days and a traditional lender can't move that fast
- You're flipping — sale will pay off the loan in 6-12 months
- You're in the purchase + rehab phase of a BRRRR strategy
- The deal needs leverage against ARV rather than current value
DSCR vs hard money — FAQs
Can I refinance a hard money loan into a DSCR loan?
Yes — this is the classic BRRRR refinance. Once the property is rehabbed, leased, and stabilized, a DSCR loan pays off the hard money lender at the new (post-rehab) appraised value. You replace 12-14% interest-only with a 30-year fixed and pull cash out if the new appraisal supports it.
Is a DSCR loan cheaper than hard money?
By a wide margin on rate, yes. DSCR rates run several percentage points below hard money, and DSCR amortizes over 15-40 years instead of charging interest-only. Hard money's value isn't in the rate — it's in speed and rehab funding that DSCR can't provide.
Can I close a DSCR loan in under 14 days?
TQL closes DSCR purchases in 15-21 days when title, appraisal, and insurance line up. If the seller demands a 7-day close on a distressed asset, hard money is the only realistic option for the initial purchase. Refinance into DSCR after closing.
Why do investors use both products?
Different stages, different tools. Hard money buys + rehabs distressed inventory at speed. DSCR holds the stabilized rental long-term at investor-grade rates. Mature portfolios use hard money for acquisitions, DSCR for the permanent take-out — and rinse and repeat.
Does TQL offer hard money loans?
TQL specializes in permanent investor financing — DSCR, bank statement, P&L, and asset utilization mortgages. We're the take-out lender on the back end of a flip or BRRRR project, not the rehab-phase lender. If you need rehab funding, we'll refer you to a hard money partner and refinance you out when the project stabilizes.
Finishing a flip or BRRRR? Lock in the long-term loan.
We’re the permanent take-out side of your deal. Once the rehab is done and the property is leased, our DSCR loan pays off the hard money and locks in 30-year fixed cash flow.