Question 1

Can I use a DSCR loan to buy a primary home?

Accepted Answer

No. DSCR loans are investment property products only. For a primary residence, you need a conventional or government-backed loan.

Question 2

Does DSCR require a higher down payment than conventional?

Accepted Answer

Usually yes. Most DSCR lenders want 20-25% down. Conventional loans for primary homes can go as low as 3%.

Question 3

Which loan has the lower interest rate?

Accepted Answer

Conventional rates are typically lower. DSCR is a non-QM product, so lenders price in more risk. Rates vary by borrower profile and market conditions.

Question 4

Can I hold a DSCR loan in an LLC?

Accepted Answer

Yes. Most DSCR lenders allow LLC vesting. Conventional loans do not — they require individual borrowers.

Question 5

What credit score do I need for each loan?

Accepted Answer

Conventional typically starts at 620. DSCR lenders often want 620-640 minimum, with better terms above 700.

Question 6

Do DSCR loans work for short-term rentals in El Dorado County?

Accepted Answer

Some lenders allow Airbnb income for DSCR calculations. Not all do — confirm with your broker before assuming short-term rents qualify.

Conventional vs DSCR Loans in Placerville, CA