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in Firebaugh, CA
Firebaugh buyers face a clear fork: conventional loans for primary residences or DSCR loans for rental properties. Most borrowers choose based on how they'll use the property, not which loan sounds better.
Conventional loans verify your W-2 income and require you to live in the home. DSCR loans ignore your tax returns entirely and qualify you on rental income alone.
Conventional loans deliver the lowest rates in Firebaugh when you're buying a home to live in. You'll need a 620+ credit score, verifiable income, and 3-5% down for most purchases.
Lenders underwrite you, not the property. They review paystubs, tax returns, and debt-to-income ratios to confirm you can afford the payment. These loans work for primary homes, second homes, and investment properties with stricter rules.
DSCR loans exist for one purpose: financing rentals without digging through your tax returns. Underwriters calculate the property's monthly rent divided by its total housing payment (PITIA). A ratio above 1.0 means the rent covers the mortgage.
You cannot live in a DSCR-financed property. These are investor-only loans. Most programs require 20-25% down and accept credit scores as low as 640, though better credit unlocks better pricing.
The rate gap tells the story. Conventional loans in Firebaugh run 0.75-1.25% lower because they're safer for lenders. DSCR pricing reflects higher risk and the flexibility of no income docs.
Conventional loans cap your debt-to-income ratio around 50%. DSCR loans don't care about your DTI at all—your car payment and credit card balances are irrelevant. The property either cash flows or it doesn't.
Choose conventional if you're living in the Firebaugh property. The rate savings and lower down payment requirements make this obvious for primary residences. Even on investment properties, conventional wins if you have clean tax returns and solid W-2 income.
DSCR loans serve self-employed landlords and investors who show low taxable income by design. If you write off enough to tank your DTI, DSCR lets the rental income speak for itself. Rates vary by borrower profile and market conditions.
No. DSCR loans require the property to be rented. Owner-occupancy violates loan terms and triggers the due-on-sale clause.
DSCR loans often close in 18-21 days since there's no income verification. Conventional takes 25-35 days with full underwriting.
Yes, but expect 15-25% down and stricter reserve requirements. DSCR loans offer simpler approval for pure investment deals.
Conventional requires 620 minimum. DSCR typically starts at 640, though some lenders accept 620 with larger down payments.
Conventional requires PMI below 20% down. DSCR loans don't have PMI but price the higher risk into the rate instead.