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in Livingston, CA
Livingston investors face a clear choice: conventional loans that review your tax returns, or DSCR loans that only care about rental income. The right option depends on whether you're buying your first rental or scaling a portfolio that's eating up your debt-to-income ratio.
Conventional loans offer lower rates if your finances look clean on paper. DSCR loans work when the property's rent covers the mortgage but your W-2 or 1099 income complicates approval.
Conventional loans require clean tax returns and stable income. You'll need 620+ credit for investment properties, 15-25% down, and enough income to cover all debts plus the new mortgage.
Fannie Mae caps you at 10 financed properties. If you've got decent W-2 income and aren't maxed on DTI, conventional gives you the lowest rate. Most Livingston investment properties close conventional when buyers have simple income profiles.
DSCR loans skip your tax returns entirely. Lenders calculate the property's monthly rent divided by the total housing payment. You need a ratio above 1.0, ideally 1.25+, to get approved.
These loans work for Livingston investors with complex returns, multiple properties, or write-offs that tank their taxable income. You'll pay more in rate, but there's no 10-property cap and no income documentation beyond a rent schedule or appraisal.
The rate spread runs 0.5 to 1.5 points higher on DSCR. A conventional loan at 7% might price at 7.75% for DSCR with the same credit and down payment. That gap widens if your DSCR ratio sits below 1.25 or credit drops under 700.
Conventional reviews your entire financial life. DSCR only cares if the rent covers the payment. If you've got 12 rental properties and your DTI is blown out, DSCR is often the only option that works.
Go conventional if your tax returns are clean, your DTI has room, and you're under 10 financed properties. The rate savings over 30 years outweigh the documentation hassle for most straightforward buyers.
Choose DSCR when you've maxed out Fannie limits, your tax returns show heavy write-offs, or you're buying multiple properties in Livingston this year. It costs more upfront but removes income as a barrier entirely.
Most DSCR lenders require the property to be rent-ready at closing. If it needs major rehab, you'll need renovation financing first or pay cash to fix it before refinancing into DSCR.
Yes, DSCR works for cash-out refis if the property's rent supports the new payment. You'll need 1.0+ DSCR on the higher loan amount and typically six months of seasoning on title.
Most DSCR programs start at 640 credit, but expect better pricing at 680+ and best rates above 720. Lower scores mean higher rates or larger down payments to offset risk.
No, DSCR is strictly for investment properties. If you're buying a home to live in, you need conventional, FHA, or another owner-occupied loan program.
They use an appraisal with rent schedule or actual lease agreements. The appraiser estimates market rent, then the lender divides that by your total monthly payment including taxes and insurance.