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in Loomis, CA
Loomis sits in a unique spot for real estate investors — close to both Sacramento employment centers and the Sierra foothills appeal. That mix creates demand for both owner-occupied homes and rental properties.
Conventional loans work well for primary residences and traditional buyers. DSCR loans serve investors who buy based on rental income, not W-2 earnings.
Conventional loans are the standard mortgage most borrowers use for homes they'll live in. Fannie Mae and Freddie Mac back these loans, which means predictable guidelines and competitive rates.
You qualify based on your personal income, credit score, and debt-to-income ratio. Expect to provide W-2s, pay stubs, and tax returns. Down payments start at 3% for owner-occupants, though 20% avoids PMI.
These loans offer the lowest rates when your credit is strong. Most Loomis buyers using conventional financing have FICO scores above 680 and steady employment history.
DSCR loans ignore your W-2 income completely. Instead, underwriters look at one number: can the property's rent cover the mortgage payment plus expenses?
A DSCR of 1.0 means rental income exactly equals the debt service. Most lenders want 1.1 to 1.25 for approval. You can use current leases or an appraisal rent schedule to establish income.
These loans work for investors with multiple properties or 1099 income that doesn't show well on tax returns. Down payments typically start at 20-25%. No tax returns, no pay stubs, no employment letters.
The qualification method separates these loan types entirely. Conventional uses your personal finances. DSCR uses the property's numbers. That single difference drives everything else.
Rates on DSCR loans run 1-2% higher than conventional because there's more lender risk. You'll also see higher down payment requirements and slightly elevated closing costs.
Conventional loans close faster — typically 21-30 days. DSCR loans take 30-45 days since appraisers need to establish market rents. Documentation is lighter with DSCR, but underwriting still takes time.
Choose conventional if you're buying a home to live in or have clean W-2 income. The rates are better, down payments are lower, and underwriting is straightforward when your financials are solid.
Pick DSCR when you're buying rental property and don't want personal income scrutinized. This makes sense for investors with multiple properties, self-employed borrowers, or those using creative tax strategies that reduce reported income.
In Loomis, we see conventional loans dominate primary residence purchases. DSCR loans show up for investment properties near downtown or along the Taylor Road corridor where rental demand stays consistent.
No. DSCR loans are strictly for investment properties. You cannot occupy the home as your primary residence or second home.
Conventional loans typically require 620 minimum, with best rates at 740+. DSCR loans usually need 660-680 minimum depending on the lender.
Yes. Most lenders want 6-12 months of mortgage payments in reserves. Conventional loans may require less or waive reserves entirely for strong borrowers.
Conventional loans generally have lower closing costs. DSCR loans often include higher lender fees and require more detailed appraisals.
Yes. After living in the home for at least 12 months, you can convert it to a rental. The loan terms don't change.
They divide monthly rental income by the total monthly debt service (mortgage payment plus taxes, insurance, HOA). A ratio above 1.0 means the property covers costs.