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Folsom attracts real estate investors for good reason. Strong rental demand, a growing population, and proximity to Sacramento make it a solid market for buy-and-hold strategies.
DSCR loans are built for exactly this market. The property's rent covers the debt — your W-2 or tax returns stay out of it.
620
Min Credit Score
1.0–1.1 typical
Min DSCR Ratio
20–25%
Down Payment
None
Income Docs Required
Non-QM / Investment
Loan Type
DSCR Loans in Folsom
Lenders calculate your Debt Service Coverage Ratio by dividing the property's gross rent by the monthly loan payment. A ratio of 1.0 means rent covers the payment exactly. Most lenders want 1.1 or higher.
Credit requirements typically start at 620. Expect 20–25% down on most DSCR deals. Some lenders allow ratios below 1.0 with a larger down payment.
Local decision guide
Use this guide to connect dscr loans eligibility, lender expectations, and local market factors before comparing payment options in Folsom.
Folsom attracts real estate investors for good reason. Strong rental demand, a growing population, and proximity to Sacramento make it a solid market for buy-and-hold strategies.
DSCR loans are built for exactly this market. The property's rent covers the debt — your W-2 or tax returns stay out of it.
Lenders calculate your Debt Service Coverage Ratio by dividing the property's gross rent by the monthly loan payment. A ratio of 1.0 means rent covers the payment exactly. Most lenders want 1.1 or higher.
DSCR is a non-QM product. That means retail banks almost never offer it. You need a broker with access to wholesale non-QM lenders — and there are real differences between them.
Rate spreads between DSCR lenders can be significant. Reserves requirements, prepayment penalties, and max loan amounts vary widely. Shopping matters here more than on a conventional deal.
The deals I see fall apart when investors don't run a realistic rent analysis first. Use actual market rents, not optimistic projections. Lenders use an appraiser's rent schedule — not your estimate.
Short-term rentals are trickier. Some DSCR lenders will accept Airbnb income using AirDNA data. Others require a long-term lease. Know your lender's policy before you're in contract.
A conventional investor loan uses your personal income and caps you at 10 financed properties. DSCR has no such cap for most lenders — scale your portfolio without hitting a ceiling.
Hard money moves faster but costs more. DSCR rates are higher than conventional, but they're long-term financing. Use hard money to close fast, then refinance into DSCR once the property is stabilized.
Folsom sits in Sacramento County, which means conforming loan limits apply to conventional deals. DSCR loans follow non-QM guidelines — loan limits can go much higher depending on the lender.
The Folsom rental market benefits from Intel, state government workers, and UC Davis Health employees. That tenant base supports stable occupancy — which is exactly what makes DSCR ratios hold up.
Most lenders want a 1.1 DSCR or better. Some go down to 0.75 with a larger down payment and stronger credit.
No. Lenders use an appraiser's market rent schedule. Your own projections don't count toward the DSCR calculation.
Some lenders accept short-term rental income using AirDNA data. Others require a signed long-term lease. Ask your broker before applying.
Plan for 20–25% down. A few lenders allow 15% with a higher rate and strong DSCR.
Yes. Most DSCR lenders don't cap the number of financed properties. This is a key advantage over conventional investor loans.
Yes, DSCR rates run higher because it's a non-QM product. Rates vary by borrower profile and market conditions.