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DSCR Loans in Santa Monica
Santa Monica rental properties command premium rents that often justify DSCR financing. Beach proximity and strong tenant demand create cash flows that work for this program.
Most Santa Monica investors we work with use DSCR loans to avoid W-2 income verification. Self-employed owners and portfolio builders prefer this route when buying multifamily or beach-area rentals.
You need a 1.0 DSCR minimum for most lenders—rental income must cover the mortgage payment. Higher ratios unlock better rates, and Santa Monica rents usually deliver 1.15 to 1.25 on well-priced deals.
Credit scores start at 620, but 680+ gets you competitive pricing. Expect 20-25% down payment, and the property must appraise with rental income documentation from a lease or appraisal report.
DSCR lenders are non-QM shops, not your typical Fannie Mae sources. We work with 30+ who price Santa Monica deals differently based on property type and loan size.
Rates run 1.5 to 3 points above conventional, depending on DSCR ratio and credit profile. Prepayment penalties are standard—expect two to five years of lockout on most programs.
Santa Monica's high property values mean DSCR loans here often hit $1M to $2M+. Not every lender prices jumbo DSCR well, so we shop aggressively across our network to find competitive terms.
The biggest mistake is underestimating rental income. Use actual market rents from the appraisal, not optimistic projections. A weak rental comp can kill your DSCR and force more money down.
Bank Statement loans let you use personal income from deposits, while DSCR ignores your income entirely. If the property cash flows, DSCR wins for simplicity and privacy.
Hard Money works for fix-and-flip timelines, but DSCR offers 30-year amortization for buy-and-hold investors. Bridge loans bridge gaps, but DSCR provides permanent financing from day one.
Santa Monica's rent control affects DSCR calculations. Appraisers use actual lease income for occupied units, which may be below market if the tenant has been there years.
Coastal Commission rules and parking requirements can delay closings. DSCR lenders want clear title and no pending litigation, so address HOA or zoning issues before you apply.
Yes, if the property is vacant. The appraiser will estimate market rent based on comparable rentals. Occupied units require actual lease amounts.
Absolutely. DSCR loans work for 1-4 unit properties, and multi-units often hit higher DSCR ratios due to combined rental income.
1.25 or higher unlocks tier-one pricing. Anything below 1.0 requires compensating factors like larger down payments or higher credit scores.
Yes. DSCR loans allow LLC ownership, which most conventional loans don't. This is a major advantage for asset protection.
Expect 30-45 days. Santa Monica appraisals can add time due to unique property types and coastal location factors.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.