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in Fowler, CA
Fowler investors face a clear choice: conventional financing backed by personal income, or DSCR loans qualified purely on rental cash flow. The right path depends on whether you're buying your first rental or scaling a portfolio.
Most buyers default to conventional because it's familiar. But DSCR loans often make more sense for Fowler's multi-unit properties and small apartment buildings where rent coverage tells the real story.
Conventional loans offer the lowest rates and smallest down payments for owner-occupied properties—3% down for first-time buyers. Investment properties need 15-20% down, and you'll max out at 10 financed properties across your portfolio.
Lenders pull tax returns, W-2s, and pay stubs to calculate debt-to-income ratio. You need stable employment history and provable income that covers all monthly debt plus the new mortgage.
DSCR loans ignore your W-2 entirely. They qualify based on one number: monthly rent divided by monthly mortgage payment. A ratio above 1.0 means the property pays for itself, and most lenders want to see 1.25 or higher.
You'll pay 20-25% down and accept rates 1-2% higher than conventional. But there's no property limit, no tax return scrutiny, and no employment verification—just the rental income analysis.
The rate gap hurts. Conventional might price at 6.5% while DSCR sits at 8%. On a $300,000 Fowler duplex, that's $375 more per month in interest—$135,000 over 30 years.
But conventional caps you at 10 properties and requires full income documentation every time. DSCR lets you close on property 11, 12, and beyond using only rent rolls and appraisals. Rates vary by borrower profile and market conditions.
Use conventional for your first 1-4 rentals if you have W-2 income and want the lowest payment. The rate savings alone justify the paperwork until you hit the 10-property wall.
Switch to DSCR when you're scaling past 10 properties, have inconsistent W-2 income, or run an S-corp that shelters personal income. Fowler's affordable duplexes and fourplexes typically hit the 1.25 DSCR threshold with market rents.
Yes. Most investors use conventional for their first rentals to get better rates, then switch to DSCR after hitting the 10-property limit or when income documentation becomes complicated.
No. DSCR loans require rental income, so the property must be leased. For flips, you need hard money or conventional construction financing.
Small multifamily units in Fowler often hit 1.2-1.4 DSCR with market rents. Single-family rentals can fall below 1.0 in higher-priced neighborhoods.
Only through refinancing. You'd pay closing costs again and likely get a higher rate, so it rarely makes sense unless you're pulling cash out.
Both require 620+ credit minimum. Conventional pricing improves significantly above 740, while DSCR rate adjustments are smaller across credit tiers.