Question 1

Can I use a DSCR loan to buy a primary residence in Arcata?

Accepted Answer

No. DSCR loans are investment property products only. For a primary home, you need conventional or a government-backed loan.

Question 2

What credit score do I need for each loan?

Accepted Answer

Conventional typically requires 620+. Most DSCR lenders want 660-680 minimum, with better terms above 720.

Question 3

Do DSCR loans require tax returns?

Accepted Answer

No tax returns required. The lender qualifies the deal based on the rental property's income versus its debt payments.

Question 4

Which loan has a lower interest rate?

Accepted Answer

Conventional rates are almost always lower. DSCR loans carry a premium because they're portfolio products with different risk profiles. Rates vary by borrower profile and market conditions.

Question 5

Can I buy a multi-unit rental with a conventional loan?

Accepted Answer

Yes, up to 4 units with conventional financing if you meet income and credit requirements. Above 4 units, you'll need a commercial or DSCR product.

Conventional vs DSCR Loans in Arcata, CA