Loading
in Folsom, CA
Folsom attracts both primary home buyers and real estate investors. These two groups usually need very different loan products.
Conventional loans are built for buyers who earn W-2 or documented income. DSCR loans are built for investors whose properties pay for themselves.
Conventional loans aren't government-backed. That means stricter credit standards but also no upfront mortgage insurance premiums.
You'll need solid income documentation, a clean debt-to-income ratio, and typically at least 5% down. Strong borrowers often get the best rates available.
DSCR loans skip your personal income entirely. Lenders look at whether the rental property covers its own mortgage payment.
A DSCR of 1.0 means rent equals the payment. Most lenders want 1.1 or higher. No tax returns, no pay stubs — just the lease and an appraisal.
Local decision guide
Use this comparison to weigh Conventional Loans and DSCR Loans through local payment fit, eligibility, documentation, and timing before choosing a path in Folsom.
Folsom attracts both primary home buyers and real estate investors. These two groups usually need very different loan products.
Conventional loans are built for buyers who earn W-2 or documented income. DSCR loans are built for investors whose properties pay for themselves.
Conventional loans aren't government-backed. That means stricter credit standards but also no upfront mortgage insurance premiums.
The biggest split is qualification method. Conventional lenders underwrite you. DSCR lenders underwrite the property.
HousingWire flagged the 30-year fixed hitting 6.57% recently — that matters differently here. DSCR investors run cash flow math. Higher rates tighten DSCR ratios and can make deals harder to pencil. Rates vary by borrower profile and market conditions.
Buying a home to live in Folsom? Conventional is almost always the right call. Lower rates and better terms beat DSCR for owner-occupants every time.
Buying a Folsom rental property and your tax returns show low net income? DSCR is likely your path. Self-employed investors with write-offs use it constantly.
No. DSCR loans are for investment properties only. Primary residences require conventional, FHA, VA, or another owner-occupant loan type.
No tax returns required. Lenders qualify the loan based on rental income, an appraisal, and the property's DSCR ratio.
Conventional loans typically carry lower rates. DSCR loans price higher due to investor risk. Rates vary by borrower profile and market conditions.
Most DSCR lenders want at least a 660 credit score. Some go down to 620, but pricing gets worse. A 700+ score gives you meaningfully better terms.
Most DSCR lenders require 20-25% down. Conventional investment property loans also need 15-25%, so the gap isn't huge on down payment.
Yes, but lenders will use your net income from two years of tax returns. Heavy write-offs often reduce qualifying income significantly.