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in Fresno, CA
Fresno investors face a clear choice: conventional loans for owner-occupied properties or DSCR loans for pure rental plays. The difference comes down to how you qualify and what you're buying.
Conventional financing requires W-2 income and debt-to-income ratios under 50%. DSCR loans ignore your personal income entirely—they only care if the rent covers the mortgage payment.
Conventional loans offer rates in the low 6% range as of February 2026, with terms from 10 to 30 years. You need 620+ credit for most programs, 3% down for primary homes, 15% for investment properties.
Lenders underwrite your tax returns, pay stubs, and debt ratios. Maximum DTI is typically 50%. These loans work best for owner-occupants or investors with strong W-2 income who want the lowest rate.
DSCR loans skip tax returns and pay stubs. Lenders divide the property's rental income by the mortgage payment to get the debt service coverage ratio. Most programs want 1.0 or higher—meaning rent equals or exceeds the payment.
Minimum credit is 640, down payment starts at 20%. Rates run 0.5% to 1.5% above conventional because this is non-QM financing. These loans fit self-employed borrowers and investors buying multiple properties without income constraints.
The rate spread is the biggest cost difference. Conventional loans price lower because they follow agency guidelines. DSCR loans charge more to offset the lack of income documentation and higher default risk.
Occupancy rules flip the choice for most buyers. Conventional allows 3% down if you live there. DSCR requires 20% down and only works for investment properties—you can't qualify a primary residence this way.
Use conventional if you're buying a primary home or have clean W-2 income. The rate savings over 30 years is significant. Use DSCR if you're self-employed, own multiple rentals, or the property cash flows but your DTI is maxed out.
Fresno's rental market supports both strategies. A property that rents for $1,800 with a $1,600 payment hits the 1.13 DSCR most lenders want. Run the numbers on your specific property before choosing.
Yes. Lenders use market rent appraisals, not your actual lease. You qualify based on what the property should rent for, not current tenant payments.
Some do, usually 3 years of declining penalties. Ask your broker—many lenders offer no-penalty options at a slightly higher rate.
Yes, but Fannie Mae caps you at 10 financed properties total. DSCR loans have no property limit, which matters for active investors.
Most lenders want 1.0 or higher. Some approve 0.75 DSCR with bigger down payments and strong credit, but expect rate adjustments.
No. DSCR loans are portfolio products without assumability features. Buyers refinance when you sell.