Question 1

Can I use DSCR for a short-term rental in Fort Bragg?

Accepted Answer

Yes. Many DSCR lenders accept projected or actual Airbnb income. You'll need documentation of rental history or a market rent analysis.

Question 2

What credit score do I need for each loan?

Accepted Answer

Conventional lenders typically require 620 minimum. DSCR lenders often require 660-680, though this varies by lender.

Question 3

Which loan has a lower down payment?

Accepted Answer

Conventional can go as low as 3% for primary homes. DSCR loans typically require 20-25% down on investment properties.

Question 4

Can I buy under an LLC with either loan?

Accepted Answer

DSCR lenders commonly allow LLC ownership. Conventional loans almost always require the borrower to take title personally.

Question 5

Do DSCR loans check my personal debt-to-income ratio?

Accepted Answer

No. DSCR loans skip DTI entirely. The property's income-to-debt ratio drives the decision, not your personal finances.

Question 6

Which loan is better if I'm self-employed?

Accepted Answer

DSCR. Self-employed borrowers often show low taxable income, which kills conventional approval. DSCR sidesteps that problem completely.

Conventional vs DSCR Loans in Fort Bragg, CA