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in Point Arena, CA
Point Arena's coastal rental market attracts two types of buyers with different financing needs. Conventional loans work for primary homes and owner-occupied properties, while DSCR loans target pure investment plays.
The choice hinges on one question: are you living here or renting it out? Your answer determines which loan structure makes sense and which lenders will even talk to you.
Conventional loans demand full income documentation—W-2s, tax returns, pay stubs. You need 620+ credit and stable employment history. Rates typically run lower than non-QM options when you qualify.
Down payment starts at 3% for primary homes, but jumps to 15-20% for investment properties. Most borrowers hit better rates at 20% down. Debt-to-income ratio caps at 45-50% depending on the lender.
DSCR loans ignore your W-2 income entirely. Lenders calculate debt service coverage ratio—monthly rent divided by mortgage payment. You need 1.0 or higher, though 1.25 opens more options.
Minimum 20-25% down, sometimes 30% for weaker deals. Credit requirements sit around 660-680. No tax returns, no employment letters. The property itself must carry the loan based on market rent.
Conventional loans price off your personal creditworthiness and income. DSCR loans price off property performance. Rates vary by borrower profile and market conditions, but DSCR typically runs 0.5-1.5% higher.
Occupancy determines everything. Conventional works for primary homes and sometimes second homes. DSCR only finances non-owner-occupied rentals. You cannot live in a DSCR-financed property without violating loan terms.
Choose conventional if you're buying a primary home or have strong W-2 income. You'll get better rates and more flexible terms. It's the default for most residential purchases in Point Arena.
Choose DSCR if you're acquiring rental property and don't want to expose personal income. This works for self-employed buyers, investors with complex returns, or anyone building a portfolio. The property must generate enough rent to cover the payment.
No. DSCR loans require non-owner-occupied rental properties only. You need conventional financing for second homes or vacation properties you'll use personally.
DSCR often closes faster since there's no employment verification or tax return review. Conventional loans require more documentation but typically close in 30 days.
Yes. Both conventional and DSCR loans require full appraisals. DSCR lenders also need a rent schedule showing market rental rates for the property.
Yes through refinance. Many investors start with conventional then convert to DSCR when they move out and rent the property. You'll need 20-30% equity.
Conventional allows 620 credit, while DSCR typically requires 660-680. Both punish lower scores with higher rates, but conventional has a lower floor.