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in Hanford, CA
Most Hanford buyers default to conventional loans. But if you're buying rental property here, DSCR loans often make more sense.
Conventional lenders care about your W-2. DSCR lenders care about the rent check. That difference changes everything for investors in Kings County.
Conventional loans from Fannie Mae and Freddie Mac are the default for primary homes and second properties. You need documented income, decent credit, and solid tax returns.
For owner-occupied homes in Hanford, conventional financing gets you the lowest rates. Investment properties work too, but the bar is higher—25% down minimum, stricter debt ratios.
DSCR loans qualify you on rental income alone. No W-2. No tax returns. Just the property's ability to cover the mortgage payment.
Lenders calculate your Debt Service Coverage Ratio—monthly rent divided by monthly mortgage payment. Above 1.0 means the property pays for itself. Most lenders want 1.25 or higher.
Conventional loans scrutinize you. DSCR loans scrutinize the property. If you're self-employed or your tax returns show losses, conventional underwriting becomes a nightmare.
Rates matter here. Conventional loans run 0.5-1% lower for investment properties. DSCR rates are higher but approval odds are better if your income picture is messy.
Conventional caps you at 10 financed properties. DSCR lenders don't count. If you're building a portfolio in Hanford and Kings County, that ceiling matters.
Buying your own home in Hanford? Conventional wins. Lower rates, smaller down payment, easier approval if you have stable W-2 income.
Buying rental property with complicated income? DSCR makes sense. Self-employed investors, portfolio builders, and anyone with tax write-offs that kill their qualifying income should look here first.
Run the numbers both ways. Sometimes conventional saves you enough on rate to justify the paperwork hassle. Other times DSCR is your only real path to approval.
No. DSCR loans are for investment properties only. You must rent out the property—owner occupancy disqualifies you from this program.
Conventional loans typically require 620+ for investment properties. DSCR lenders often accept 680+ but some go as low as 660 with higher rates.
Yes. Lenders need an appraisal plus a rent schedule showing what the property can realistically lease for in the current Hanford market.
DSCR loans often close quicker—less documentation to verify. Conventional loans involve full income underwriting which takes longer if your file is complex.
Yes. Investors often do this when their income drops or they want to pull equity without showing tax returns.