Overview
Investors compare products as if they were three prices for the same loan.
They are not. They are three answers to three jobs.
Conventional underwrites you — income, DTI, tax returns — then the property.
DSCR underwrites the property — rent vs. payment — then the rest of the file.
Hard money underwrites a short plan — speed, basis, exit — and prices the risk of that plan.
Pick the basis that matches the job. Then talk price.
Qualification basis
| Conventional | DSCR | Hard money | |
|---|---|---|---|
| Primary test | Your income and DTI | The rental’s income vs. its payment | Deal, timeline, and collateral |
| Tax returns as the story | Usually yes | Not the approval test | Usually no |
| Typical use on a rental you own | Permanent loan when the personal file works | Permanent refinance when the asset should be the file | Short hold, rehab, or speed |
| Entity vesting | Often awkward | Common | Common |
| Rate vs. the other two | Often the lowest when you qualify | Often higher than conventional | Often the highest — you are paying for a short fuse |
| Calendar | Full-doc pace | Typically lighter income stack; not date-certain | Built for speed; balloon / maturity is the point |
Those rows stay qualitative on purpose. Exact scores, ratios, and day-counts vary by program. Publishing them here would train you to self-reject — or to self-approve.
When conventional is the right tool
You can show income the way a retail file wants. The DTI works. The property count fits the overlay. You want the cheapest long-term note.
Use it. DSCR is not a personality upgrade. It is a different test.
If that file is going to take months of return explanations, you do not have a cheap loan. You have a cheap rate on a process that may not finish.
When hard money is the right tool
You need speed or you are still creating the asset. Rehab. A hold that is not yet a clean rental story. A clock that a permanent file will not meet.
Hard money is honest about being temporary. The mistake is treating it as permanent because the extension desk keeps saying yes.
An exit plan is part of the product. DSCR is, in many cases, that exit once the property can support a longer payment.
When DSCR is the right tool
You already own the investment property. It can tell a rent story. You want a longer loan without rebuilding a personal-income file.
Write-offs. LLC vesting. A conventional property cap. A bridge that is done. Idle equity you will not free by selling.
The rate is often higher than conventional. That is the trade for access and for qualifying the asset. Compare it to the cost of the current note, the cost of a sale, or the cost of waiting.
Common questions
Can I skip hard money and go straight to DSCR?
This kit is refinance of property you already own. If the door is already a rental that can support a payment, you may not need a bridge. If the story is still a project, you might. Review the asset, not the brand names.
If DSCR is more expensive, why wouldn’t I wait for conventional?
Waiting has a price. Balloon risk. Idle equity. Another tax year that looks worse on paper. Run that price. Do not assume cheaper-later is free.
Is DSCR just rebranded hard money?
No. Different basis, different job, different calendar. One is built to be permanent on a performing rental. The other is built to be short.
Will using one block me from the others later?
A loan on a property is a fact in your stack. Future options depend on the property, the program, and the file at that time. No article should promise a later conventional approval.
What still matters
This table does not underwrite you.
Credit, reserves, property type, and state rules still apply on DSCR. Conventional overlays still apply on conventional. Hard-money term sheets still apply on hard money.
Bring the rents, the current note, and the job. A specialist at {{BRAND_NAME}} can say which basis may fit this property — and say if none of them should be forced.
Bottom line
If you roughly get the idea and want to know whether it might fit, a specialist at {{BRAND_NAME}} ({{PARENT_NAME}}) can review this property — no pressure, and an honest answer if it isn’t a fit.
See if your property may qualify Call {{PHONE_DISPLAY}}
{{BRAND_FULL_NAME}} · NMLS #{{NMLS}} · Equal Housing Lender
Keep learning
This material is educational. DSCR loans are generally business-purpose financing on investment property — not a government program and not a consumer or primary-residence loan. Program rules vary. {{PARENT_NAME}}, NMLS #{{NMLS}}. Equal Housing Lender.