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DSCR Loans in Auburn
Auburn's rental market attracts investors buying anything from Old Town Victorians to newer builds near Highway 49. DSCR loans let you qualify using the property's rental income instead of your W-2 or tax returns.
Most Auburn investment properties need a 1.0 DSCR minimum—rent covers the mortgage payment. Properties in established neighborhoods near downtown or Interstate 80 typically appraise reliably and support stronger rental projections.
You need 20-25% down and a 620+ credit score for most DSCR loans. Lenders calculate DSCR by dividing monthly rent by the total housing payment—principal, interest, taxes, insurance, and HOA fees.
If rent is $2,500 and your total payment is $2,000, that's a 1.25 DSCR. Strong ratios unlock better rates. Ratios below 1.0 still get approved but cost more and require bigger down payments.
DSCR lenders order rental appraisals that include market rent analysis. The appraiser pulls comparable leases to estimate what your Auburn property should rent for—not what you hope it will rent for.
Rates vary by borrower profile and market conditions. Expect rates 1-2% above conventional loans. Lenders price deals on DSCR ratio, credit score, loan amount, and property type. Single-family homes get better terms than condos.
Auburn investors use DSCR loans when they already own rentals and don't want to show more personal income. Also works for buyers with strong W-2 income who maxed out their DTI on conventional loans.
The mistake I see: investors calculating DSCR without property taxes and insurance. Auburn sits in Placer County with decent tax rates, but insurance costs climbed. Factor the full PITI payment or your DSCR falls short at closing.
Conventional investor loans cap at 10 financed properties and require full tax returns. DSCR loans have no property limit and skip personal income verification entirely.
Bank statement loans work for self-employed buyers using personal income. DSCR ignores your income completely—only the rental cash flow matters. Hard money costs more but closes faster for distressed Auburn properties needing heavy rehab.
Auburn rental demand stays steady from Bay Area transplants and Sacramento commuters. Properties near Old Town or walking distance to shops lease faster and command higher rents—both strengthen your DSCR.
Watch seasonal tourism impacts if you're buying near trails or recreation areas. Long-term rentals perform more predictably than short-term for DSCR qualification. Lenders won't use Airbnb projections for underwriting standard DSCR deals.
Yes. The appraiser includes a market rent analysis based on comparable Auburn leases. Lenders use that figure even if the property sits empty at closing.
Yes, up to four units. Lenders average the rental income across all units. Vacancy rates impact underwriting—expect higher down payments on duplexes and fourplexes.
Some lenders approve ratios as low as 0.75. You'll pay higher rates and need 25-30% down. Properties close to 1.0 get better pricing than those significantly below.
Yes. Lenders allow cash-out up to 75% LTV on Auburn investment properties. Same DSCR calculation applies using current market rent and the new proposed payment.
Most lenders require 6-12 months of mortgage payments in reserves. More properties in your portfolio mean higher reserve requirements—plan accordingly.
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.