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in La Verne, CA
Most La Verne buyers default to conventional loans without realizing DSCR might work better for investment properties. Conventional loans require W-2 income verification and restrict how many properties you can finance.
DSCR loans flip the script. They qualify you based on rental income, not your tax returns. That matters in a market where investors compete against owner-occupants for single-family homes.
Conventional loans offer the lowest rates you'll find — typically 0.5-1% below investor products. You need 620+ credit, documented income, and clean DTI ratios under 50%.
Fannie and Freddie cap you at 10 financed properties. After four mortgaged properties, rates jump and reserves get expensive. Most W-2 earners hit their limit around property six or seven.
DSCR loans ignore your W-2s and tax returns entirely. Lenders approve based on the property's rent divided by the mortgage payment — that's your debt service coverage ratio.
You need a 1.0 DSCR minimum (rent equals payment) though 1.25+ gets better pricing. Credit floors sit around 680, and most deals require 20-25% down. No property count limits.
The rate gap runs 0.75-1.5 points in favor of conventional. But conventional stops working after 10 properties or when your DTI blows out from property four onward.
DSCR pricing stays consistent whether it's property one or property twenty. You also skip the reserve requirements that kill conventional deals — no need to prove six months PITI per property sitting in your account.
Use conventional for your first rental or if you're W-2 with clean income docs. The rate savings compound over 30 years, and you're not bumping property limits yet.
Switch to DSCR when your portfolio hits five properties, or immediately if you're self-employed writing off most income. La Verne investors buying multiple single-families use DSCR to avoid the conventional finance cap.
No. DSCR loans only finance investment properties that generate rental income. You need conventional, FHA, or another owner-occupied product for primary homes.
Most lenders require 1.0 minimum (rent covers the mortgage payment). Ratios above 1.25 unlock better rates and terms across most wholesale lenders.
For investment properties, both typically require 15-25% down. Conventional might offer 15% on your first rental; DSCR usually starts at 20%.
Yes. Many investors refi into DSCR to free up DTI for additional purchases. You'll pay a higher rate but unlock borrowing capacity.
DSCR often closes quicker — no tax return reviews or employment verification. Conventional takes longer when you're juggling multiple income sources or complex W-2 scenarios.