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DSCR Loans in Merced
Merced's rental market draws investors chasing UC Merced student housing and Central Valley workforce rentals. DSCR loans let you scale a portfolio here without showing W-2s or tax returns.
This loan type works when the property's rent covers the mortgage. Banks don't care about your day job income. They underwrite the lease, not your paystub.
Most Merced deals pencil at 1.0x to 1.25x DSCR with typical rents between $1,800 and $2,500. That ratio means the rent covers or exceeds the monthly loan payment.
You need a DSCR of 1.0 or higher for most lenders. Some accept 0.75x if you bring 25% down and have reserves. Credit minimums sit at 660 to 680 depending on loan-to-value.
Expect to put down 20% to 25% on investment properties. Lenders want 6 to 12 months of reserves in the bank. No pay stubs, no tax returns, no employer letters.
Properties must appraise and show market-rate rent via a lease or appraiser's rent schedule. Occupancy doesn't matter—these loans work for vacant properties too.
DSCR loans come from private lenders and debt funds, not conventional banks. Rates run 1.5% to 3% higher than Fannie Mae investor loans. You pay for the flexibility.
SRK Capital works with 30+ DSCR lenders who compete on rate, reserves, and DSCR minimums. Some allow 0.75x ratios. Others go to 85% LTV for strong borrowers.
Rate locks last 30 to 60 days. Closings take 21 to 30 days with clean appraisals. These lenders move faster than conventional because they skip income verification.
Merced DSCR deals work best when you buy below $450k and rent above $2,200. The math breaks at higher price points unless rents exceed $3,000. Run the numbers before you tour properties.
Student housing near UC Merced gets tricky. Lenders want 12-month leases, not academic-year contracts. Structure leases correctly or you'll scramble at underwriting.
Vacant properties require appraiser rent schedules showing market rent. If the appraiser lowballs rent by $200, your DSCR drops and the deal dies. Choose appraisers who know Merced rentals.
Conventional investor loans require W-2s and cap you at 10 financed properties. DSCR loans skip both limits. You can own 50 rentals and still qualify if each property cash flows.
Bank statement loans work for self-employed buyers purchasing primary homes. DSCR loans work for anyone buying investment property. Different tools for different goals.
Hard money and bridge loans close faster but cost more and max out at 12 months. DSCR loans offer 30-year fixed terms at lower rates. Use hard money to acquire, DSCR to refinance.
Merced County taxes run 1.1% to 1.3% of assessed value. Add $150 to $250 monthly for insurance. Those costs eat into your DSCR calculation. Budget conservatively.
UC Merced drives demand in specific zip codes. Lenders recognize this and some require larger reserves for student-heavy properties due to turnover risk.
Central Valley agricultural employment creates steady workforce housing demand. Properties near food processing plants and distribution centers see consistent lease-ups. Lenders view this as lower risk than purely student-dependent rentals.
Most lenders want 1.0x minimum, meaning rent covers the full mortgage payment. Some accept 0.75x with 25% down and extra reserves.
Yes. The appraiser provides a market rent schedule. Lenders use that figure to calculate DSCR even with no tenant in place.
Yes, but you need 12-month leases. Academic-year contracts won't work. Some lenders require higher reserves for student housing.
Expect 21 to 30 days from application to closing. Appraisal turnaround drives the timeline, usually 7 to 10 days locally.
Rates vary by borrower profile and market conditions. Plan for 1.5% to 3% above conventional investor loan rates for comparable terms.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.