Question 1

What is a DSCR loan and how does it work?

Accepted Answer

DSCR stands for Debt Service Coverage Ratio. Lenders divide the property's monthly rent by its mortgage payment — a ratio above 1.0 means the rent covers the debt.

Question 2

Can I use a DSCR loan to buy in Los Banos with an LLC?

Accepted Answer

Yes. Most DSCR lenders allow LLC vesting. Some require a personal guarantee, so confirm structure with your lender before closing.

Question 3

Do DSCR lenders check my personal income at all?

Accepted Answer

Most do not verify income for qualification. Some pull a soft credit check and verify assets, but your W-2 or tax returns are not used.

Question 4

How are DSCR rates different from conventional investment loans?

Accepted Answer

DSCR rates run higher than conventional loans — typically 1-2 points above conventional investment pricing. Rates vary by borrower profile and market conditions.

Question 5

What property types qualify for DSCR in Merced County?

Accepted Answer

Single-family rentals, 2-4 unit properties, and some condos qualify. Rural or agricultural parcels may require specialized programs outside standard DSCR.

Question 6

How fast can a DSCR loan close in Los Banos?

Accepted Answer

Most DSCR loans close in 21-30 days. Some lenders offer expedited timelines for experienced investors with clean files.

DSCR Loans in Los Banos, CA — Qualify on Rental Income