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in Colusa, CA
Conventional loans work well for owner-occupied homes and traditional W-2 buyers in Colusa. DSCR loans exist for investors who want rental property financing based on rent income, not personal tax returns.
Most primary residence buyers in Colusa County use conventional financing. Real estate investors—especially those with complex income or multiple properties—lean toward DSCR programs that skip the tax return requirement entirely.
Conventional loans require W-2 income, pay stubs, and tax returns to prove you can afford monthly payments. You need 620+ credit for most programs, though 740+ gets you the best rates.
Down payments start at 3% for first-time buyers and 5% for repeat buyers on primary homes. Investment properties require 15-25% down. PMI applies when you put down less than 20%, adding $50-200 monthly on typical Colusa purchases.
DSCR loans qualify you based on the property's rental income, not your W-2 or tax returns. Lenders calculate the debt service coverage ratio by dividing monthly rent by the monthly mortgage payment. Most programs want a 1.0 DSCR or higher.
Credit requirements sit at 660-680 minimum, with 25-30% down required on most deals. No income documentation means no pay stubs, no tax returns, and no employment letters. The property itself must cash flow enough to cover the loan.
Conventional loans verify your personal income and employment. DSCR loans ignore your income entirely and focus on whether the rent covers the mortgage. This matters in Colusa County where agricultural income, self-employment, or multiple rental properties can complicate tax returns.
Rates differ by about 0.5-1.5% between programs. Conventional loans offer lower rates because they carry less lender risk. DSCR rates run higher but eliminate the documentation headache for investors who don't want to share tax returns or explain business write-offs.
Choose conventional if you're buying a primary residence in Colusa or have clean W-2 income with tax returns that support your application. The lower rates and down payment options make conventional the default for most homebuyers.
Pick DSCR if you're buying rental property and either don't want to provide tax returns or your returns don't reflect true income due to business deductions. Self-employed buyers, real estate investors with multiple properties, and anyone prioritizing privacy over rate should explore DSCR options.
No. DSCR loans only work for investment properties that generate rental income. Primary residences require conventional, FHA, or other owner-occupied loan programs.
DSCR loans often close faster because they skip income verification. Conventional loans need employment letters, pay stubs, and tax return analysis, which adds processing time.
Yes. Conventional allows up to 4 units as owner-occupied. DSCR works for any investment property regardless of unit count, including single-family rentals.
Yes, if the property is now a rental. Many investors refinance to DSCR after converting a primary home to investment property to avoid income documentation on future deals.
Both require full appraisals, but DSCR lenders also need a rent schedule or market rent analysis. Conventional appraisals focus only on property value and condition.