Is a hard money loan more expensive than a DSCR loan?

Yes — significantly. Hard money rates run 9.25–13.49% interest-only depending on program. DSCR loans price off the 5-year Treasury and typically run 6.99–8.49% fully amortized. The hard money premium pays for speed (10–14 day close), rehab capital on draws, and short-term commitment — DSCR loans take 21–28 days and require seasoning before they can refinance a hard money loan.

Can I use a DSCR loan to buy a flip?

Generally no. DSCR loans require a market rent schedule from the appraisal, which means the property has to be habitable and tenant-ready. A property that needs gut rehab won't appraise with a credible rent schedule, and DSCR lenders won't fund rehab capital. The standard playbook is hard money for purchase + rehab, then DSCR refinance once the property is leased and seasoned 3–6 months.

Which type of loan closes faster?

Hard money. Most hard money lenders, including AGS Lending Partners, close in 10–14 business days. DSCR loans take 21–28 days because they require a full appraisal with rent schedule, tax/insurance escrow setup, and (usually) longer underwriting due diligence.

Can the same lender do both?

Yes. AGS Lending Partners offers both hard money (Velocity 100%, Optimal matrix-priced) and 30-year DSCR. Using the same lender on both ends compresses the refinance timeline and reduces broker fees, since underwriting on the second loan can lean on the file already built for the first.

Hard Money Loan vs DSCR Loan: Which One Fits Your Deal?

Q: What's the difference between a hard money loan and a DSCR loan?

Hard money loans are short-term (6–24 months), interest-only, asset-based loans used to acquire and rehab a property. DSCR loans are long-term (typically 30-year fixed) loans used to hold the property as a rental, qualified on rental income rather than borrower W-2. Most flippers use both: hard money to buy and renovate, then DSCR to refinance and hold or sell.

Direct answer

Hard money loans are short-term, interest-only, asset-based loans used to acquire and rehab a property. DSCR loans are 30-year fixed loans used to hold the property as a rental, qualified on rental income rather than borrower W-2. They solve different problems and are usually used in sequence, not as alternatives.

The standard investor playbook: hard money to buy and renovate (close in 10–14 days, rehab funded on draws), lease the property, then DSCR refinance after 3–6 months of seasoning to pay off the hard money loan and lock in long-term financing at a lower rate.

Side by side

Dimension	Hard money	DSCR
Use case	Flip, BRRRR rehab, bridge	Long-term rental hold
Term	6–24 months IO	30-year fixed (or 5/6 ARM, 7/6 ARM, IO)
Rate	9.25–13.49% IO	6.99–8.49% (5-yr Tsy + spread)
Qualifies on	Asset value + ARV + experience	Rent ÷ PITIA (DSCR ratio)
Income docs required	None	None
Funds rehab	Yes (held in escrow, paid on draws)	No
Max LTV / LTC	100% LTC (Velocity), 80–95% LTC (Optimal)	80% LTV purchase, 75% cash-out
Close timeline	10–14 business days	21–28 calendar days
Min FICO	660 (none on FlipCo)	660
Borrowing entity	LLC / corp / trust	LLC / corp / trust (required)

The standard BRRRR sequence at AGS

Buy + Rehab. Close on AGS Velocity (100% LTC) or Optimal — funds purchase + rehab, 10–14 day close. Rate runs 9.25–12.99% IO.
Rent. Once rehab is complete, lease the property. Most DSCR lenders require the lease in place (or a market rent appraisal supporting the rent number) before refinancing.
Repeat-ready: Refinance. After 3–6 months seasoning, refinance into the AGS 30-Year DSCR program at the 5-year Treasury + spread. This pays off the hard money loan and converts the property to long-term financing at a much lower rate.
Repeat. Pull capital from cash-out at refinance to seed the next deal. Velocity allows up to 70% ARV, which means an investor with a strong forced-appreciation story can pull most of the project capital back at refinance.

Run the numbers on your deal

The AGS Lending Partners side-by-side calculator shows hard money rate, payment, and cash-to-close for any deal — and points the file to the right program automatically.

Open the calculator →

Frequently asked questions

Can I use hard money for a long-term hold?

Technically yes, but the rate (9.25–13.49% IO) is too expensive to carry long-term. Hard money is structured for 6–24 month exits — sale or refinance. Investors who hold past 24 months almost always refinance into DSCR or conventional financing because the carry cost on hard money will eat the cash flow.

Can I use a DSCR loan to buy a property that needs work?

Generally no. DSCR loans require a market rent schedule (1007 or 1025 appraisal), which the appraiser can't credibly produce on a property that isn't habitable. For value-add projects, use hard money first, lease the property after rehab, then refinance into DSCR.

How long do I have to wait before I can refinance hard money into DSCR?

3–6 months of seasoning is standard. Some DSCR lenders require 6 months; AGS Lending Partners can run a delayed financing exception at 3 months on rate-term refinances when the rehab is fully completed and a lease is in place.

Is the same lender doing both common?

It's becoming standard. Using one lender on both the hard money and DSCR sides compresses the second-loan timeline (UW already has the borrower file), reduces broker fees, and gives the borrower one team to call when something needs to move. AGS Lending Partners is a direct lender on both products.

What if I want to flip and not hold?

Then DSCR isn't part of the equation — hard money funds the buy and rehab, and the sale closes the loan. The flipper's choice is purely between the AGS Velocity (100%) and Optimal (matrix-priced) programs based on the cash-vs-rate trade-off.