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in Auburn, CA
Auburn's rental market draws investors from Sacramento looking for better cash flow than they'd find in the metro. Conventional loans work well for buyers using the property as a primary residence or those with W-2 income who want a second home.
DSCR loans qualify you based on what the property earns, not your tax returns. For investors with multiple properties or self-employed income that looks small on paper, this changes everything.
Conventional loans offer the lowest rates if you're putting the property to traditional use. You'll need solid credit (620 minimum, 740+ for best pricing) and provable income through pay stubs or tax returns.
Investment properties require 15-25% down depending on how many mortgaged properties you already own. Rates run about 0.5% higher than owner-occupied pricing, and you'll hit Fannie Mae's 10-financed-property cap eventually.
DSCR loans ignore your personal income entirely. The underwriter looks at one number: monthly rent divided by monthly mortgage payment (PITIA). Most lenders want to see 1.0 or higher, meaning the rent covers the full payment.
You'll pay 20-25% down and rates run 1-2% above conventional. But there's no property count limit, no DTI calculation, and you can close under an LLC. Auburn's solid rental demand makes hitting DSCR requirements realistic on most properties.
The qualification method is the fundamental split. Conventional underwriting pulls two years of tax returns, calculates your debt-to-income ratio, and counts every mortgage payment you're making. DSCR underwriting orders an appraisal with rent schedule and does basic math.
Pricing reflects that simplicity. You're paying for the flexibility to skip income documentation and scale past Fannie Mae's limits. For Auburn properties pulling $2,500-3,500/month, that premium makes sense if you're buying multiple deals or your income doesn't document well.
Go conventional if you're buying a primary residence, second home, or first rental property with clean W-2 income. The rate savings over 30 years is substantial, and the process is straightforward when your income is easy to document.
Choose DSCR when you're scaling a portfolio, own multiple properties already, file business tax returns that minimize taxable income, or want to close quickly without employment verification. Auburn investors flipping to rentals often use DSCR to avoid the income documentation maze.
Yes, but you'll pay more in rate than conventional. If you have W-2 income and can document it, conventional will save you significant money over the loan term.
Most want 1.0 or higher, meaning rent covers the full payment. Some lenders go down to 0.75 with higher rates and more down payment.
Absolutely, up to 10 financed properties with Fannie Mae. You'll need documented income and 15-25% down depending on your existing portfolio.
Yes, investors do this to pull cash out or eliminate income documentation requirements. Expect higher rates but more flexible qualification.
DSCR loans typically close in 21-30 days versus 30-45 for conventional. Less documentation means faster underwriting.