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in Concord, CA
Concord investors face a clear fork: qualify based on your W-2 income with a conventional loan, or use the property's rental income with a DSCR loan. The right choice depends on whether you're buying your first rental or your fifth.
Conventional loans work for owner-occupants and investors who can document steady income. DSCR loans ignore your tax returns entirely and focus on whether the rent covers the mortgage.
Conventional loans require proof of income, typically two years of tax returns and W-2s. You'll need a 620+ credit score for an investment property and at least 15% down, though most lenders want 20-25%.
Rates run lower than DSCR programs because these are agency-backed loans. You're capped at 10 financed properties total across your portfolio, which matters if you plan to scale past a few rentals.
DSCR loans skip the tax returns and pay stubs. Lenders calculate the property's monthly rent divided by the mortgage payment (the debt service coverage ratio). Most want to see 1.0 or higher, meaning rent meets or exceeds the payment.
You'll need 20-25% down and a 660+ credit score for most DSCR programs. No property count limits exist, so investors with 15+ rentals still qualify. Rates run 0.5-1.5% higher than conventional due to the non-QM structure.
The income question separates these programs. Conventional lenders add up all your rental income, subtract expenses, then verify you can afford another mortgage. DSCR lenders only care if this specific property's rent covers its own payment.
Portfolio size matters more than most borrowers realize. Hit your 11th financed property and conventional financing stops. DSCR programs don't count properties, which is why serious investors switch over even when they could still qualify conventionally.
Use conventional financing for your first 1-3 Concord rentals if you can document income and want the lowest rate. The DTI calculation gets stricter with each property, so start planning your switch to DSCR before you hit the wall.
Choose DSCR from the start if you're self-employed with complex returns, already own several rentals, or want to scale quickly. The rate premium buys you flexibility that conventional loans can't match.
Yes, but you'll pay a higher rate than conventional. Most first-time landlords save money going conventional unless their income documentation is messy.
They order an appraisal with a rent schedule showing market rents for comparable properties. Your actual lease doesn't matter if the property isn't rented yet.
Yes, but you're limited to 75% LTV on investment properties versus 80% on primary homes. DSCR cash-out refi rules are similar.
Fannie Mae counts any property with a mortgage in your name, even if it's your primary home. Paid-off properties don't count toward the limit.
Absolutely. Most investors use conventional for properties 1-6, then switch to DSCR once their DTI gets too tight or they want faster scaling.