Accurately downscaling precipitation from coarse to high spatial resolutions remains a critical challenge in climate and hydrometeorological modeling. A key limitation is the frequent misclassification of dry and wet regions, which compromises the realism and reliability of high-resolution outputs. To address this, we propose a deep learning-based downscaling framework that explicitly models dry/wet classification by transforming low-resolution 6×6 precipitation inputs into high-resolution 60 × 60 binary classification fields. We evaluate two architectures, a convolutional encoder-decoder and a conditional Wasserstein generative adversarial network (WGAN), utilizing three training strategies: (1) using binary wet/dry inputs, (2) using precipitation intensity inputs, and (3) using precipitation intensity inputs and adding physical constraints. Models are trained and validated on both synthetically generated precipitation fields and real radar-estimated hourly precipitation data over the contiguous United States. Performance is assessed using metrics including the overall probability of zero (
$ {\mathrm{P}}_0 $) and spatial autocorrelations. Results show that incorporating intensity information improves dry/wet classification, while adding physical constraints further enhances accuracy, generalization, and physical consistency, especially for WGAN models. The convolutional encoder-decoder produces smoother outputs with stable performance regarding marginal statistics, whereas the WGAN generates sharper boundaries and more realistic dry/wet fields, improving on the spatial dependence structure. Furthermore, we demonstrate that the derived dry/wet classification fields can be used as binary masks to bias correct downscaled precipitation fields, enhancing both statistical fidelity and spatial realism. These findings highlight the value of a physically informed bias-correction strategy for improving the spatial realism of high-resolution precipitation fields from coarse-scale inputs.