Loading
in Irwindale, CA
Irwindale's industrial-heavy market attracts investors looking at mixed-use and residential rental properties. The loan you choose depends entirely on whether you're qualifying as a buyer or an investor.
Conventional loans use your W-2 income and credit score. DSCR loans ignore your tax returns and qualify you on the property's rental cash flow alone.
Conventional loans are the default choice for buyers with W-2 income and clean credit. You'll need 620+ credit, typically 3-5% down for primary homes, 15-25% for investment properties.
Rates run lower than DSCR because you're giving the lender full income documentation. Fannie Mae and Freddie Mac set the rules, so approval is straightforward if your DTI and credit check out.
The catch for investors: your personal income must support the new mortgage payment plus your existing debts. If you own multiple rentals already, that debt stacks up fast.
DSCR loans qualify you based on one number: does the rent cover the mortgage payment? We calculate the debt service coverage ratio by dividing monthly rent by the full PITI payment.
Lenders want to see 1.0 or higher, meaning rent equals or exceeds the payment. You can close with ratios as low as 0.75 if you put more money down, but expect rate hits below 1.0.
Your tax returns don't matter. Your job doesn't matter. We're underwriting the asset, not you. That makes DSCR the go-to for self-employed investors or anyone with complex income.
Conventional loans price 0.5-1.0% lower than DSCR because they're agency-backed and less risky for lenders. But you trade that rate advantage for strict income and debt limits.
DSCR loans cost more upfront—higher rates, bigger down payments—but they don't care if you're maxed out on conventional financing. You can finance unlimited properties as long as each one cash flows.
Credit requirements differ too. Conventional needs 620 minimum, DSCR typically starts at 660. Conventional caps you at 10 financed properties; DSCR has no portfolio limit.
Use conventional if you're buying a primary residence or your first 1-4 investment properties. The rates are better and down payments are lower if you can document income.
Switch to DSCR once your rental portfolio grows beyond conventional limits, or if your personal income doesn't support traditional underwriting. Self-employed investors use DSCR from day one to avoid tax return scrutiny.
For Irwindale specifically, DSCR works well on small multifamily or mixed-use properties near the commercial zones. Conventional makes more sense for single-family purchases in the residential pockets.
Yes, but you'll pay more than conventional. Most investors save DSCR for later properties where conventional financing isn't available.
1.0 or higher gets you the best rates. Below 1.0 works with larger down payments, but expect pricing adjustments.
Yes. Conventional sometimes waives appraisals on strong deals. DSCR always requires one because rent comps drive the approval.
DSCR loans are investment-only. You'd need to refinance into a conventional loan to change occupancy status.
DSCR often closes quicker because there's no income verification. Conventional takes longer if your employment or income needs extra documentation.