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in Tustin, CA
Tustin sits in one of Orange County's most active rental markets. Buyers here face a real choice: finance a primary home or build a rental portfolio.
Conventional loans serve owner-occupants and some investors. DSCR loans are built for rentals — qualification is based on the property's income, not yours.
Conventional loans aren't backed by the government. Fannie Mae and Freddie Mac set the guidelines, and lenders compete hard on rates for qualified borrowers.
You'll need at least a 620 credit score and a down payment starting at 3%. Strong W-2 income and low debt-to-income ratios get the best pricing.
DSCR loans qualify based on one number: does the rent cover the mortgage? A DSCR of 1.0 means rent equals the payment. Most lenders want 1.0 or higher.
No tax returns. No pay stubs. No employment verification. That's the point. Self-employed investors and high-earners with complex write-offs use these constantly.
HousingWire flagged the 30-year fixed hitting 6.57% — that's the rate environment DSCR borrowers are pricing deals in right now. Rates vary by borrower profile and market conditions.
Conventional loans price lower than DSCR. But DSCR doesn't care about your W-2. For investors with multiple properties or heavy write-offs, that trade-off is worth it.
Down payment requirements split these two further. Conventional can go as low as 3% for a primary. DSCR lenders typically require 20-25% down on investment properties.
If you're buying a home to live in and have steady income, conventional is your loan. It's cheaper, and you'll qualify easily with solid W-2 documentation.
If you're buying a rental in Tustin and the numbers work — rent covers the mortgage — DSCR gets the deal done without your tax returns getting in the way.
Some investors use both. Conventional for their own home, DSCR to scale the portfolio without triggering debt-to-income issues on the next conventional approval.
No. DSCR loans are for non-owner-occupied investment properties only. You need a conventional or government loan for a primary residence.
Most DSCR lenders in our network require 660-680 minimum. Higher scores get better pricing on rate and down payment.
Yes, up to a point. Conventional allows 1-4 unit investment properties, but your personal DTI must qualify. That limits how many you can stack.
Divide monthly rent by the full mortgage payment (PITIA). A ratio of 1.25 means rent is 25% higher than the payment — lenders like that.
DSCR often closes faster. No income verification means fewer documents to chase. A clean deal can close in 21-25 days.
Possibly. Some lenders accept a DSCR of 1.0, meaning rent equals the payment. Below 1.0 is harder to place but not always impossible.