Question 1

Can I use a DSCR loan to buy a vacation rental in Lakeport?

Accepted Answer

Yes. DSCR loans are built for investment properties, including short-term rentals. Some lenders accept projected Airbnb income to calculate DSCR.

Question 2

What credit score do I need for each loan?

Accepted Answer

Conventional typically requires 620 minimum. Most DSCR lenders want 660 or higher.

Question 3

Do DSCR loans require tax returns?

Accepted Answer

No. That's the point. DSCR lenders qualify the property, not your personal income or employment history.

Question 4

Which loan has lower interest rates?

Accepted Answer

Conventional rates are almost always lower. DSCR carries a premium for the flexible qualifying. Rates vary by borrower profile and market conditions.

Question 5

Can I use a conventional loan for a rental property in Lakeport?

Accepted Answer

Yes, but you'll qualify using personal income and face stricter reserve requirements. Investment property conventional loans also require at least 15% down.

Question 6

What does DSCR actually mean?

Accepted Answer

Debt Service Coverage Ratio. It compares monthly rent to monthly mortgage payment. A 1.25 DSCR means rent is 25% more than the payment.

Conventional vs DSCR Loans in Lakeport, CA