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Hard Money to DSCR Refinance: How to Exit Into a 30-Year Rental Loan
By Jaken Finance Group · Principal, Jaken Finance Group
Hard money to DSCR refinance explained — seasoning rules, cash-out LTV, DSCR minimums, timeline, and the exact steps to exit hard money into 30-year rental financing in 2026.
A hard money to DSCR refinance is the standard exit for BRRRR investors — acquire and rehab on short-term hard money (8.99%–13.5% at Jaken Finance Group), stabilize the rental, then refinance into a 30-year DSCR loan (5.75%–10.5%) that retires the balloon and returns your capital. Executed well, the sequence turns one pool of cash into a repeatable acquisition machine; executed late, every extra month on hard money burns roughly twice the interest.
Canonical reference: For rates, terms, and a three-product decision matrix, see DSCR vs Hard Money vs Conventional (2026).
Key stats at a glance
- Hard money carry: 9.5%–13% interest-only — industry surveys, 2026
- DSCR exit rate: 6.125%–8.50% standard profiles — DSCR Finder, June 2026
- Cash-out DSCR LTV: typically 70%–75% of new appraised value
- Rate-term DSCR LTV: typically 75%–80%
- Seasoning: 3–6 months common; no-seasoning programs exist for documented rehabs
- DSCR close: 14 business days at Jaken Finance Group; 21–30 days industry-wide
- Target DSCR: 1.25+ for best pricing; 1.0+ for standard programs
Hard money vs DSCR exit — what changes at refinance
| Factor | Hard money (entry) | DSCR loan (exit) |
|---|---|---|
| Typical rate | 9.5%–13% (surveys, 2026) | 6.125%–8.50% |
| Term | 6–24 months + balloon | 30-year fixed or ARM |
| Payment | Interest-only | Amortizing (IO options exist) |
| Qualification basis | ARV + scope + experience | Property rent ÷ payment (DSCR) |
| Income docs | None | None — leases / market rent schedule |
| Property condition | Distressed OK | Rent-ready, rehab complete |
| Appraisal basis | As-is + ARV | As-stabilized with rent schedule (1007) |
| LTV basis | Up to 75% ARV / 100% LTC (Jaken, qualified files) | 70%–75% cash-out; 75%–80% rate-term |
| Prepayment penalty | Minimal | 3–5 year step-down common |
| Reserves | Varies | 3–6 months PITIA |
| Entity vesting (LLC) | Standard | Standard |
The cost of waiting — dollar impact
On a $250,000 balance:
| Position | Rate | Monthly cost | 6-month cost |
|---|---|---|---|
| Hard money (IO) | 11.0% | $2,292 | $13,750 |
| DSCR (30-yr amortizing) | 7.25% | $1,705 | $10,231 |
| Savings after exit | — | $587/mo | $3,519 |
Add extension fees (0.5–1 point = $1,250–$2,500 per extension) if the hard money term lapses before your refinance closes. The refinance should be in process before rehab finishes, not after.
The exit timeline — week by week
| Phase | Weeks | What happens |
|---|---|---|
| Acquisition + rehab | 0–12 | Hard money funds purchase + draws; keep invoices and permits — they document rehab for no-seasoning programs |
| Stabilization | 10–16 | Lease signed or market-rent (1007) support; property photo-ready |
| DSCR application | 12–14 | Submit while final rehab draws complete — don’t wait |
| Appraisal + underwriting | 14–17 | As-stabilized appraisal with rent schedule; entity docs; insurance requote to landlord policy |
| Closing | 16–18 | DSCR loan pays off hard money balloon; cash-out proceeds fund the next deal |
Jaken Finance Group underwrites DSCR exits in 14 business days — and because we also originate the hard money side, the file (appraisal history, draw records, scope of work) is already in-house.
Step 1 — plan the exit before you buy
Run the DSCR math on conservative market rent before you sign the purchase contract:
- Projected rent ÷ projected PITIA at exit-rate assumptions ≥ 1.1 leaves margin for rate drift
- Confirm the ARV supports a payoff at 75% LTV: hard money balance ÷ 0.75 ≤ realistic ARV
- Check dscr cash-out refinance with no seasoning rules if you need capital back fast
Model both stages on the fix and flip calculator and DSCR calculator.
Step 2 — document the rehab like a lender will read it
No-seasoning and early-seasoning DSCR programs lend on the new appraised value only when the value jump is documented: contractor invoices, draw inspection reports, permits, before/after photos. Investors who keep clean rehab files refinance weeks earlier than those who don’t.
Step 3 — stabilize and choose rate-term vs cash-out
| Goal | Structure | Typical LTV | Notes |
|---|---|---|---|
| Just retire the balloon | Rate-term refi | 75%–80% | Fastest approval path, seasons soonest |
| Recover invested capital | Cash-out refi | 70%–75% | The BRRRR play — proceeds fund the next purchase |
| Payment breathing room | Cash-out + IO period | 70%–75% | IO payment helps DSCR qualify |
See cash-out refinance investment property requirements for documentation specifics.
When to switch — decision path
-
Is rehab complete and the property rent-ready?
- No → Stay on hard money; DSCR appraisals need a finished product.
- Yes → Continue.
-
Does projected rent cover the DSCR payment at 1.0+?
- Yes → Start the DSCR application now.
- No → Consider IO payment structures, a no-ratio DSCR program, or bridge until rents support the ratio.
-
Do you need cash out, and does 75% of the new value clear the payoff plus proceeds?
- Yes → Cash-out DSCR.
- No → Rate-term now; cash-out later after seasoning.
-
Is your hard money maturity inside 90 days?
- Yes → Apply immediately — appraisal plus underwriting takes 3–5 weeks, and extensions cost points.
Market-level timing guides: Chicago hard money vs DSCR — when to switch · Indiana hard money vs DSCR — when to switch.
Side-by-side: documentation requirements
| Document | Hard money (entry) | DSCR refinance (exit) |
|---|---|---|
| Tax returns / W-2s | Not required | Not required |
| Lease or market rent schedule | Not required | Required |
| Scope of work + draw records | Required | Required for no-seasoning value |
| As-stabilized appraisal (with 1007) | Not required | Required |
| Entity docs (LLC) | Usually required | Usually required |
| Landlord insurance policy | Builder’s risk | Required at closing |
| Reserves (3–6 mo PITIA) | Varies | Required |
| Payoff statement | — | Required (hard money lender issues) |
Sources
- DSCR Finder: Current DSCR Loan Rates June 2026
- DSCR Finder: DSCR Loan Requirements 2026
- HardMoneyHome.com: Hard Money Rates 2026
- Freddie Mac PMMS — benchmark 30-year fixed context
Jaken Finance Group funds both sides of the BRRRR sequence: fix and flip / hard money at 8.99%–13.5% (up to 100% LTC on qualified files, 75% ARV, 7–10 business day close) and DSCR rental loans at 5.75%–10.5% (30-year terms, 14 business day close). Portfolio strategy: scale a rental portfolio with DSCR loans.
Rates, terms and conditions offered only to qualified borrowers and are subject to change at any time without notice. All loans are subject to full underwriting for loan approvals. Jaken Finance Group only finances non-owner occupied investment properties.
Hard Money to DSCR Refinance: How to Exit Into a 30-Year Rental Loan — next step (2026)
Run the exit DSCR at conservative rent and today’s rates before you buy — a flip that can’t refinance is a forced sale.
Submit scenario · Pre-qualify · (833) 264-7776.