Loading
in Duarte, CA
Duarte investors face a choice: qualify using your W-2 income or the property's rental numbers. Conventional loans reward clean tax returns and steady paychecks. DSCR loans ignore your income entirely and focus on whether the rent covers the mortgage.
Most Duarte landlords with multiple properties hit a wall with conventional financing. Lenders cap you at 10 financed properties and scrutinize your debt-to-income ratio. DSCR loans skip both restrictions, making them the go-to for serious portfolio builders in Los Angeles County.
Conventional loans deliver the lowest rates if you qualify the traditional way. You need 620+ credit, provable income through W-2s or tax returns, and clean debt ratios. For Duarte investment properties, expect 15-25% down and the property must appraise.
These loans max out at 10 financed properties nationwide. That's a hard stop even if you have excellent credit. Lenders also count rental income conservatively, typically using just 75% of collected rents against your debt load.
DSCR loans flip the script for Duarte investors. No tax returns, no pay stubs, no income verification. The underwriter runs one number: monthly rent divided by monthly mortgage payment. Hit 1.0 or higher and you're in the game. Most deals need 1.25 to get the best pricing.
You can finance unlimited properties with DSCR loans. No Fannie Mae caps, no portfolio limits. Rates run 0.5-1.5% higher than conventional, but you're buying speed and scalability. Expect 20-25% down and slightly higher closing costs from Non-QM lenders.
The rate spread tells the story. Conventional loans in Duarte price 0.5-1.5% lower because they're agency-backed. DSCR loans carry higher rates as Non-QM products with more lender risk. That gap shrinks when you factor in deals conventional lenders reject outright.
Qualification flips completely between these products. Conventional lenders want two years of tax returns showing steady income and DTI under 45%. DSCR lenders want a current lease and an appraisal proving the rent covers debt service. One measures you, the other measures the property.
Choose conventional if you're buying your first Duarte rental and have clean W-2 income. The lower rate saves real money over 30 years. Switch to DSCR when you hit property number 5 or 6, or when your tax write-offs tank your qualifying income.
DSCR loans make sense for self-employed Duarte investors from day one. If your tax returns show aggressive deductions, conventional lenders will lowball your income. DSCR underwriters never see those returns. They only care if the Duarte property cash flows at 1.25x debt service.
Yes, existing leases work perfectly for DSCR qualification. The underwriter uses the current lease amount to calculate your debt service coverage ratio.
Conventional loans require 620 minimum for investment properties. DSCR loans typically need 680+ for the best rates, though some programs start at 660.
Yes, expect 0.25-0.5% higher lender fees with DSCR loans. You're paying for the flexibility of no income verification and unlimited property financing.
Absolutely. Many investors refinance to DSCR when they need to free up qualifying income for the next purchase.
DSCR loans handle 2-4 unit properties easily since they focus on total rental income. Conventional loans work too but count against your 10-property limit faster.