Question 1

Can I use DSCR to buy a short-term rental in Napa?

Accepted Answer

Yes. Many DSCR lenders accept short-term rental income projections. Napa's strong vacation rental market makes this a common use case.

Question 2

Do DSCR loans require more money down than conventional?

Accepted Answer

Generally yes. Most DSCR lenders require 20-25% down. Conventional can go as low as 3% for qualified buyers.

Question 3

Which loan has better interest rates?

Accepted Answer

Conventional rates are lower. DSCR carries a premium for the flexibility of skipping income docs. Rates vary by borrower profile and market conditions.

Question 4

Can a self-employed borrower use a conventional loan?

Accepted Answer

Yes, but lenders will require two years of tax returns. If your write-offs reduce your stated income, DSCR may be the stronger option.

Question 5

Can I hold a DSCR loan in an LLC?

Accepted Answer

Yes. Most DSCR lenders allow LLC vesting. Conventional loans typically require the loan to be in your personal name.

Question 6

What credit score do I need for a DSCR loan in Napa?

Accepted Answer

Most DSCR lenders require at least a 660-680 credit score. Conventional loans start at 620, though better scores get better rates.

Conventional vs DSCR Loans in Napa, CA