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in Calabasas, CA
Calabasas investors face a choice: conventional financing that looks at your W-2 income or DSCR loans that only care about rental cash flow. The right answer depends on whether you're buying a primary home or building a rental portfolio.
Conventional loans offer lower rates and better terms for owner-occupants. DSCR loans let you finance unlimited properties without income verification—perfect for high-net-worth investors who don't want to share tax returns.
Conventional loans are the gold standard for primary homes and low-leverage investments. You'll need W-2s or tax returns, 620+ credit, and typically 5-20% down depending on occupancy.
Rates run 1-1.5% lower than DSCR options—a massive difference on Calabasas price points. But you hit a wall at 10 financed properties, and each loan counts against your debt-to-income ratio.
DSCR loans qualify you based on one metric: does the rent cover the mortgage? Lenders want a ratio of 1.0 or higher—meaning rental income equals or exceeds PITIA.
No tax returns. No W-2s. No DTI calculations. You can finance 20+ properties as long as each one cash flows. Expect 7.5-9% rates right now and 20-25% down on investment properties.
Rate spread is the biggest factor. On a $1.5M Calabasas rental, the difference between 6.5% conventional and 8% DSCR costs $17,000 more per year. That only makes sense if you can't qualify conventionally or need to preserve borrowing capacity.
Property limits matter for serious investors. Conventional caps you at 10 properties regardless of cash flow. DSCR has no ceiling—if the rent covers the payment, you can keep buying. Think of conventional as financing for 1-4 properties, DSCR for portfolios of 10+.
Use conventional if you can. Lower rates matter more than convenience when you're financing $1M+ Calabasas properties. Reserve DSCR for situations where conventional doesn't work—you're past 10 properties, your income shows low on tax returns, or you're scaling fast.
Many investors use both: conventional for the first few properties to lock low rates, then switch to DSCR once they hit the 10-property limit. That hybrid approach gets you the best of both worlds.
No. DSCR loans are investment-property only. You need rental income to qualify, which rules out owner-occupied homes.
Most lenders want 1.0 or higher—rent equals or exceeds the mortgage payment including taxes and insurance. Some allow 0.75 with larger down payments.
DSCR loans carry more risk for lenders since they don't verify your personal income. That risk premium costs 1.5-2.5% in rate.
Yes. DSCR typically requires 20-25% down on investment properties versus 15-20% for conventional investment loans.
Absolutely. Once you have tax returns showing the rental income, refinancing to conventional saves you thousands annually in interest.