Question 1

Can I use a DSCR loan for a primary residence?

Accepted Answer

No. DSCR loans are investment property only. You need a conventional, FHA, or VA loan for a home you plan to live in.

Question 2

What credit score do I need for a DSCR loan?

Accepted Answer

Most DSCR lenders want 680 or higher. Some go down to 660, but rates get worse fast below that threshold.

Question 3

Do conventional loans work for rental properties?

Accepted Answer

Yes, but lenders count only a portion of rental income and still verify your personal income. DSCR skips that entirely.

Question 4

Which loan closes faster in Merced?

Accepted Answer

DSCR loans often close faster because there's no income verification. Conventional with full doc can take longer to process.

Question 5

Are DSCR rates much higher than conventional rates?

Accepted Answer

Yes. Expect DSCR rates to run meaningfully above conventional. Rates vary by borrower profile and market conditions.

Question 6

How does a lender calculate DSCR?

Accepted Answer

Divide the property's gross monthly rent by the total monthly mortgage payment. A result above 1.0 means the rent covers the loan.

Conventional vs DSCR Loans in Merced, CA