Loading
in Fresno, CA
Fresno's rental market attracts both owner-occupants and investors, but each group needs different financing. Conventional loans serve primary buyers and second-home purchases well, while DSCR loans exist specifically for rental property investors.
The choice between these two options comes down to how you plan to use the property. One requires W-2 income verification, the other doesn't care about your tax returns at all.
Conventional loans require full income documentation through W-2s, tax returns, and pay stubs. You need a 620+ credit score for most programs, with better rates kicking in at 740.
Down payments start at 3% for first-time buyers on primary residences. Investment properties require 15-25% down depending on your experience as a landlord.
These loans offer the lowest rates available when you qualify. Fannie Mae and Freddie Mac set the underwriting rules, which means predictable approval criteria across all lenders.
DSCR loans approve you based on the property's rental income, not your W-2 or 1099. The lender calculates a ratio: monthly rent divided by monthly debt on the property (mortgage, taxes, insurance, HOA).
You need a DSCR of 1.0 or higher to qualify at standard rates. Below 1.0, you can still get approved but expect a rate premium of 0.5-1.0%.
These loans require 20-25% down and a 660+ credit score minimum. No tax returns, no employment letters, no explaining business write-offs that tank your income on paper.
Conventional loans beat DSCR on rate by 0.75-1.5% when you have strong income documentation. That gap matters on a $400K Fresno property—it's about $250/month in payment difference.
DSCR loans win when your tax returns show low income due to business deductions, or when you're buying multiple properties in one year. Conventional lenders cap you at 10 financed properties total; DSCR lenders don't.
Approval speed differs too. Conventional takes 3-4 weeks with full underwriting. DSCR closes in 2-3 weeks since there's no employment verification or income calculation.
Use conventional if you're buying a primary residence, second home, or your first 1-4 rental properties with strong W-2 income. The rate savings compound over 30 years and justify the documentation hassle.
Use DSCR if you're a self-employed investor, already own several properties, or bought a rental that needs work before tenants move in. DSCR also makes sense when the rent easily covers the mortgage but your tax returns show minimal income.
Fresno's rental yields often support DSCR qualification. Properties renting for $1,800-$2,200/month typically clear the 1.0 DSCR threshold on purchase prices under $350K.
No. DSCR loans are exclusively for investment properties that generate rental income. You must use conventional, FHA, or VA for primary residences.
A DSCR of 1.25 or higher gets you the best pricing. Below 1.0, expect a rate increase of 0.5-1.0% depending on credit and down payment.
Yes, but conventional caps cash-out at 75% LTV for investment properties. DSCR allows up to 80% LTV cash-out on rentals with strong DSCR.
DSCR typically closes in 2-3 weeks. Conventional takes 3-4 weeks due to employment and income verification requirements.
Yes. You can refinance a DSCR loan into conventional anytime to lower your rate, assuming you qualify with personal income documentation.