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in Duarte, CA
Duarte buyers choosing between conventional and DSCR financing face a fundamental split. Conventional loans are the standard path for owner-occupants. DSCR loans cater to investors and business owners whose income doesn't fit W-2 boxes.
The 2026 conforming limit across Los Angeles County is $1,249,125. Both loan types respect this ceiling, but they serve different borrower profiles entirely. Your choice hinges on whether you're buying to live in the home or to generate rental income.
Conventional loans are the backbone of residential lending in Duarte. Lenders underwrite based on your W-2 income, tax returns, and credit history. You'll need a credit score of 620 or higher, though 680+ opens better pricing.
PMI applies when you put down less than 20%. It cancels automatically once you hit 80% equity through payments or appreciation. Conventional loans move quickly—typically 30 to 45 days to close.
DSCR loans (Debt Service Coverage Ratio) ignore your personal W-2 income. Instead, lenders look at the property's rental income or business cash flow. You qualify based on whether the property generates enough revenue to cover the loan payment.
DSCR loans typically require 20% to 25% down and a FICO of 660 or higher. No mortgage insurance applies—the larger down payment and higher rate protect the lender.
The biggest split is income verification. Conventional lenders want your personal paystubs and tax returns. DSCR lenders ignore those and focus entirely on what the property will earn. If you're self-employed with irregular income, DSCR may be your only path.
Down payment and insurance differ too. Conventional buyers can put 3% down and carry PMI. DSCR buyers must put 20% to 25% down with no PMI option. Over a 30-year loan, that gap in cash required at closing is substantial.
Choose conventional if you're buying a home to live in and earn W-2 income. You have stable employment, tax returns that match your paystubs, and a credit score above 680.
Choose DSCR if you're an investor or self-employed business owner buying rental property in Duarte. Your personal income is irregular or comes from business cash flow. You can document the property's rental income or your business revenue.
Yes, but only if you've owned the property for at least two years and can show two years of tax returns proving the income. Lenders add 75% of documented rental income to your qualifying income.
Yes — 20% down is the only way to skip PMI on conventional. Put down 3% to 19.99% and PMI applies until you reach 80% equity. DSCR loans skip PMI entirely but require 20% to 25% down as a baseline.
Conventional loans typically close in 30 to 45 days. DSCR loans take 45 to 60 days because lenders must verify business income or lease agreements. If speed matters, conventional is the faster choice.
Conventional requires 620 FICO minimum, though 680+ gets better rates. DSCR requires 660 FICO minimum. Both are achievable, but conventional opens doors at a lower score.
Technically yes, but it's inefficient. DSCR lenders will underwrite based on the property's rental income, not your personal income. If you're owner-occupying, conventional is cheaper and faster because it uses your W-2 income directly.