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in Susanville, CA
Susanville investors face a clear choice between two financing paths. Conventional loans work for buyers using traditional income, while DSCR loans qualify you on rental cash flow alone.
The right pick depends on whether you're buying a primary home or adding to a rental portfolio. Most owner-occupants go conventional, but investors often need what DSCR delivers.
Conventional loans are the standard mortgage most people think of when buying a home. They require documented income, good credit, and typically a 3-20% down payment depending on use.
You'll need a 620+ credit score for most programs, though 740+ gets you the best rates. These loans work well for primary homes and second properties where you can verify steady employment income.
Lenders cap your debt-to-income ratio at 50%, meaning all monthly debts must stay under half your gross income. This includes your future mortgage payment plus car loans, credit cards, and existing mortgages.
DSCR loans ignore your W-2 entirely and qualify you on whether the property generates enough rent to cover its mortgage. Lenders want a debt service coverage ratio of 1.0 or higher, meaning rent equals or exceeds the full PITIA payment.
You'll need 20-25% down and a 660+ credit score for most programs. No tax returns, no pay stubs, no employment verification—just an appraisal with a rent schedule showing market rents.
These loans cost more than conventional financing, typically 0.5-1.5% higher in rate. But they let you scale a portfolio without hitting income limits that stop conventional approvals.
The income qualification gap is everything. Conventional lenders need proof you earn enough to cover all debts, which caps how many properties you can buy. DSCR lenders only care if each property pays for itself.
Down payments differ slightly—conventional allows 3% down on primary homes, 10% on second homes, 15% on investment properties. DSCR requires 20-25% regardless of property count.
Rates vary by borrower profile and market conditions. Conventional typically beats DSCR by half a point to a full point, but that spread tightens when your debt-to-income ratio climbs above 43%.
Buy your primary home in Susanville with a conventional loan. You'll get better rates, lower down payments, and straightforward approvals if you have W-2 income and decent credit.
Switch to DSCR when you're buying rentals and either can't document income or already own multiple properties. Self-employed investors use DSCR to avoid showing two years of tax returns with write-offs that kill conventional approvals.
Some investors use both—conventional for owner-occupied duplexes or house hacks, DSCR for pure investment properties. The key is matching the loan to how you'll use the property and what income you can prove.
Yes, short-term rental income works if the appraisal includes comparable rent data. Most lenders want 1-2 years of rental history or strong Airbnb comps in the area.
DSCR often closes quicker because there's no employment or income verification. You skip waiting for tax transcripts and VOE forms that slow conventional approvals.
Yes, if the property becomes your primary residence and you can document income. Many investors do this to lower their rate after moving in.
Conventional lets you use 75% of documented lease income to offset the mortgage payment. DSCR uses 100% of market rent but requires the full amount to cover PITIA.
Conventional drops to 620 minimum, giving you more options. DSCR lenders rarely go below 660, and those who do charge steep rate premiums.