Can You Use a Hard Money Loan for a Rental Property?

If you're an investor looking to buy a rental property, you might be wondering: Can I use a hard money loan for that? The short answer is yes—but not just any hard money loan.

In most cases, rental property investors turn to DSCR loans (Debt Service Coverage Ratio loans), a type of private financing specifically designed for income-producing properties.

Let’s break it down.

What Is a Hard Money Loan?

A hard money loan is asset-based financing. That means the lender cares more about the property's value than your credit score or income. These loans are fast, flexible, and commonly used for fix-and-flips, new construction, and yes—rental properties.

But not all hard money loans are the same. If you’re holding the property long-term and collecting rent, you’ll likely want a loan that considers rental income—not just a quick bridge or fix-and-flip loan.

Enter: DSCR Loans for Rentals

DSCR loans are tailored for real estate investors who plan to hold and rent out single-family or 1-4 unit properties. Instead of using your W-2 income, these loans evaluate the property’s rental income vs. monthly debt payments.

If the rent can cover the mortgage (typically a DSCR of 1.0 or higher), you’re in business.

Key DSCR Loan Benefits:

• No personal income verification

• Close in weeks, not months

• Use the property’s cash flow to qualify

• Interest-only and 30-year fixed options

When Should You Use a DSCR Loan?

If you're:

• Buying a new rental property

• Refinancing an existing one

• Tapping equity for another deal

A DSCR loan can help you scale without jumping through traditional bank hoops.

And unlike owner-occupied loans, there's no limit to how many properties you can finance.

How Alvear Lending Can Help

At Alvear Lending, we specialize in helping investors secure private financing through DSCR loans and more. We’re a broker, which means we work to get you the best deal through top-tier partners like ROC Capital.

We're active in most states (excluding California and New York unless handled under our partner’s license), and we make the process simple, even if you’re new to real estate investing.

Final Thoughts

Yes, you can use a hard money loan for a rental property—but make sure it’s the right kind. For buy-and-hold deals, DSCR loans are the smarter, scalable choice.

Ready to fund your next rental?

Book a call with Alvear Lending and let’s get started.