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in Novato, CA
Novato sits in the heart of Marin County, where median household income runs $142,785 and the 2026 conforming loan limit is $1,249,125.
The Marin County Fair returns July 1-5 with concerts and exhibits, drawing families who've just closed on homes in the area. Whether you're a salaried professional or self-employed with rental income, understanding how each program treats your financial...
Conventional loans are the backbone of Novato mortgages. They require a minimum FICO score around 620, though 740+ gets the best pricing. Down payments range from 3% to 20%, with PMI kicking in below 20% LTV.
Lenders underwrite conventional loans on your W-2 income, tax returns, and debt-to-income ratio. If you earn $142,785 (Marin's median), a conventional lender typically approves you for a loan around $570,000 assuming standard debt.
DSCR loans—Debt Service Coverage Ratio loans—flip the underwriting model. Instead of W-2 income, lenders look at the cash flow your property generates.
Self-employed buyers, real estate investors, and business owners find DSCR loans valuable because rental income counts dollar-for-dollar. You don't need to prove two years of tax returns showing W-2 employment.
Conventional loans accept W-2 income and standard employment history. DSCR loans accept rental income and business cash flow. If you're a Novato employee with a W-2, conventional wins on simplicity and lower down payment.
Down payment separates these programs sharply. Conventional starts at 3% with PMI; DSCR starts at 20-25% with no PMI but higher rates. At a $600,000 purchase in Novato, conventional might cost $18,000 down plus PMI.
DSCR wins outright when the buyer has strong rental income but weak W-2 history. Conventional wins for salaried professionals. Marin's median income of $142,785 qualifies most employees for conventional; business owners need DSCR to access their full earnings.
Pick conventional if you're a salaried professional in Novato earning near or above Marin's $142,785 median. You have a W-2, two years of employment history, and clean credit. You want to put 5-10% down and accept PMI for five to seven years.
Pick DSCR if you own rental properties, run a business, or have significant self-employment income that doesn't show cleanly on W-2s. You have 20-25% down saved and want to count your actual cash flow.
Yes, but only if you've owned the rental for two years and can document it on tax returns. Conventional lenders count 75% of verified rental income toward your qualification.
Conventional: 3-20% down. DSCR: 20-25% down typical. At a $600,000 Novato purchase, conventional costs $18,000-$120,000 down; DSCR costs $120,000-$150,000. Conventional's lower down payment makes it accessible; DSCR requires more capital upfront.
Conventional rates are lower because lenders see less risk with W-2 income. DSCR rates run 0.5-1.5% higher because cash flow is harder to verify. If rates matter most, conventional wins.
No. DSCR loans skip PMI because you put 20-25% down. Conventional loans below 80% LTV require PMI, which adds $100-$300 monthly on a $600,000 loan. DSCR avoids this cost but charges higher rates instead.
Yes, if your primary residence generates rental income—like an ADU or guest house. Lenders will count that income on a DSCR loan. If it's purely owner-occupied, conventional is your only option. DSCR shines when the property produces cash flow.