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in West Covina, CA
West Covina sits in a rental market where investors compete with owner-occupants for the same properties. The loan you choose determines how lenders qualify you—and what you can actually close on.
Conventional loans use your W-2 income and credit score. DSCR loans ignore your tax returns and qualify you on the property's rental income instead.
Conventional loans are the default for most primary residence buyers and investors with clean tax returns. You'll need a 620+ credit score, verifiable income, and 3-25% down depending on occupancy.
Rates are typically the lowest in the market—0.5-1% below DSCR pricing. Investment properties require 15-20% down, and lenders cap you at 10 financed properties if you're still buying.
DSCR loans qualify investors based on a property's rental income divided by the mortgage payment—the debt service coverage ratio. Most lenders want a 1.0+ ratio, meaning rent covers or exceeds the payment.
No tax returns, no W-2s, no employment verification. You can finance unlimited properties if the numbers work. Expect rates 1.5-2.5% higher than conventional and 20-25% down minimums.
Income qualification is the main split. Conventional lenders pull tax returns and check your debt-to-income ratio. DSCR lenders run a rent analysis and ignore everything else on your 1040.
Rates favor conventional by a wide margin—often 1.5 points lower. But conventional caps you at 10 financed properties, while DSCR has no portfolio limit if you can handle the higher cost.
Use conventional if you're buying a primary home or your first few rentals. The rate savings compound over 30 years, and most investors have the income docs to qualify.
Switch to DSCR when you hit the 10-property limit, show losses on your tax returns, or want to scale fast without income verification slowing you down. The rate premium is the price of flexibility.
Yes, but you'll pay 1.5-2.5% higher rates than conventional. Most investors save DSCR for properties that don't qualify conventionally.
Conventional requires 620+ for investment properties. DSCR lenders typically want 660-680 minimum, with better pricing at 700+.
Monthly rent divided by the full mortgage payment including taxes and insurance. A 1.0 ratio means rent equals the payment.
Yes, but only if the rate drop or cash-out benefit offsets the higher DSCR pricing. Most investors refinance the other direction.
Conventional covers 2-4 units as investment properties. DSCR works for 1-4 units and some lenders go up to 8 units.