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in Covina, CA
Covina investors face a clear fork: conventional loans treat you like a W-2 borrower, DSCR loans treat you like a landlord. The difference matters because most conventional lenders don't care if your rental property cash flows—they care about your pay stubs.
DSCR loans flip that logic. Your property income determines approval, not your tax returns. For Covina's duplex and fourplex market, this changes who qualifies and what deals pencil.
Conventional loans deliver the lowest rates available—typically 0.5% to 1% below DSCR pricing. You'll need documented income, 620+ credit, and reserves. Rates vary by borrower profile and market conditions.
Investment property conventionals cap at 10 financed properties. Expect 15-25% down depending on whether it's your second rental or your eighth. Debt-to-income ratios matter here, so adding another mortgage payment affects approval.
DSCR loans ignore your W-2, 1099, or tax returns entirely. Underwriters calculate one number: monthly rent divided by monthly PITI payment. Above 1.0 means the property carries itself. Above 1.25 gets you better pricing.
You'll pay more in rate—usually 1-2% above conventional. But there's no property limit, no income docs, and approvals happen in days not weeks. Minimum 20% down, sometimes 25% if the DSCR is tight or credit is under 680.
Conventional loans want to see stable employment and low debt. DSCR loans want to see a property that pays for itself. If you're a high-earner buying your first Covina rental, conventional wins on cost. If you're scaling a portfolio or show low taxable income, DSCR is often your only path.
Rate difference runs real money over 30 years. A 6.5% conventional versus 7.75% DSCR on a $600K loan costs an extra $450/month. But if conventional lenders decline you for DTI, that comparison is academic.
Use conventional if you're W-2 employed, have clean tax returns, and you're buying rental properties 1-5. The rate savings compound. Use DSCR if you're self-employed with write-offs, already own multiple rentals, or need speed without paperwork drama.
Covina's rental market supports both strategies. Duplexes near downtown rent well enough to hit 1.2+ DSCR ratios. For portfolio investors stacking properties, DSCR loans remove the income ceiling that stops conventional approvals cold after a few deals.
No. DSCR loans require 100% investment use. If you'll occupy any unit, you need conventional or another program entirely.
Most use an appraisal's market rent opinion. If the property is already rented, some lenders accept the lease amount if it's at market.
Yes. Conventional cash-out caps at 75% LTV on investment properties. DSCR typically allows 80% LTV if the ratio holds above 1.0.
DSCR loans close in 15-20 days because there's no income verification. Conventional takes 30-40 days with full documentation requirements.
Absolutely. Many investors start with DSCR for speed, then refinance to conventional once they can document income and want the lower rate.