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in Reedley, CA
Reedley's mix of single-family homes and multi-unit properties attracts both primary buyers and rental investors. Conventional loans dominate owner-occupied purchases, while DSCR loans serve investors who rely on rental income.
The loan you pick depends on whether you're moving in or cashing checks. Conventional lenders verify your W-2 income and tax returns. DSCR lenders ignore your paystubs and focus only on what the property earns in rent.
Conventional loans offer the best rates for borrowers who live in the home they're buying. You'll need a 620+ credit score, stable employment history, and verifiable income through W-2s or tax returns.
Down payments start at 3% for first-time buyers and 5% for repeat buyers on primary residences. Investment properties require 15-25% down. You'll pay private mortgage insurance if you put down less than 20%, but it drops off once you hit that equity threshold.
DSCR loans skip your tax returns entirely. Approval hinges on one number: monthly rent divided by monthly mortgage payment. Most lenders want a ratio of 1.0 or higher, meaning rent covers the full PITI payment.
You'll pay 20-25% down and accept rates 1-2% higher than conventional. The trade-off is speed and simplicity for investors who show low taxable income or own multiple properties. No two-year employment history, no DTI calculations, no pay stubs.
Conventional loans verify everything: income, assets, employment, credit. DSCR loans verify only credit and the property's rental income via an appraisal that includes market rent analysis. You can close a DSCR loan without handing over a single pay stub.
Rates vary by borrower profile and market conditions. Conventional loans typically price 5.5-6.5% for owner-occupants, while DSCR loans run 7.0-8.5%. That rate gap narrows if you're buying an investment property either way, since conventional treats rentals as higher risk too.
Choose conventional if you're living in the home or if you're a W-2 employee with clean tax returns. The rate savings alone justify the extra paperwork. Conventional also wins for borrowers stretching to qualify, since it allows higher DTI ratios than DSCR's rent-only calculation.
Pick DSCR if you're self-employed with heavy write-offs, buying a second or third rental, or flipping properties quickly. It works for investors who show little taxable income despite strong cash flow. Just confirm the property's rent clears the DSCR hurdle before you write an offer.
No. DSCR loans fund investment properties only. If you're moving in, you need a conventional, FHA, or VA loan that allows owner occupancy.
Most lenders want 1.0 or higher, meaning rent equals or exceeds the mortgage payment. Some approve at 0.75 with larger down payments or higher credit scores.
Yes, but Fannie Mae caps you at 10 financed properties total. Each new rental adds scrutiny to your debt-to-income ratio and reserve requirements.
DSCR loans typically close in 20-25 days since there's no income verification. Conventional takes 30-40 days with full underwriting and employment checks.
Yes. Investors refinance to DSCR when they want cash-out or when their income documentation becomes too complex for conventional underwriting.