Question 1

Can I use projected rent or does the property need existing tenants?

Accepted Answer

Both work. Existing leases provide actual income documentation. For vacant properties, lenders use an appraisal's market rent analysis to calculate DSCR and determine loan approval.

Question 2

Do I need real estate investment experience for DSCR loans?

Accepted Answer

Not necessarily. While experience helps, first-time investors can qualify if the property's numbers work. Some lenders prefer experience, but others focus solely on the DSCR calculation itself.

Question 3

How does DSCR differ from debt-to-income ratio?

Accepted Answer

DSCR compares property rental income to property debt. DTI compares your personal income to all debts. DSCR loans ignore personal income, focusing only on the investment property's performance.

Question 4

Can I refinance an existing Orinda rental property with DSCR?

Accepted Answer

Yes, DSCR loans work for both purchases and refinances. Many investors refinance to pull out equity or remove personal income documentation requirements from their original loan.

Question 5

What's the maximum loan amount for DSCR in Contra Costa County?

Accepted Answer

Most DSCR lenders go up to $3-4 million, though specific limits vary by lender. Higher loan amounts may require larger down payments or higher DSCR ratios.

DSCR Loans for Orinda Investment Properties: Income-Based Financing Without Tax Returns