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in Sacramento, CA
Sacramento's rental market keeps pulling in investors. The question isn't whether to buy — it's which loan gets you there.
Conventional loans work for owner-occupants and some investors. DSCR loans are built specifically for rental property deals where personal income isn't the story.
Conventional loans are the standard. No government backing, but strong rates for borrowers with solid credit and documented income.
You'll need at least 620 credit and 3-20% down depending on the deal. Investment properties require 15-25% down and tighter reserves.
DSCR loans qualify you on the property's rent, not your tax returns. The ratio compares rental income to the monthly loan payment.
Most lenders want a DSCR of 1.0 or higher. A 1.25 DSCR means the rent covers 125% of the mortgage — that's a clean approval.
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 Sacramento.
Sacramento's rental market keeps pulling in investors. The question isn't whether to buy — it's which loan gets you there.
Conventional loans work for owner-occupants and some investors. DSCR loans are built specifically for rental property deals where personal income isn't the story.
Conventional loans are the standard. No government backing, but strong rates for borrowers with solid credit and documented income.
HousingWire flagged the 30-year fixed hitting 6.57% recently. DSCR rates run higher than conventional — expect a spread of roughly 1-2 points. Rates vary by borrower profile and market conditions.
Conventional loans cap out at conforming limits for Sacramento County. DSCR lenders often go higher, which matters on multi-unit or higher-priced Sacramento rentals.
Buying a Sacramento home to live in? Conventional is almost always your best move. Better rates, lower down payment, more lender options.
Buying a rental and your tax returns show losses or you're self-employed? DSCR was built for that situation. The property carries the deal, not you.
No. DSCR loans are for investment properties only. You need a conventional or government-backed loan for a home you plan to live in.
Most DSCR lenders want 680 or higher. Some go down to 660, but expect a worse rate the lower you go.
Divide the property's gross monthly rent by the total monthly loan payment. A ratio at or above 1.0 means the rent covers the debt.
Yes. Lenders add stricter reserve requirements and higher down payments for rentals. Your full income and debt load still get evaluated.
DSCR loans often close faster. There's no income verification process, which removes weeks of back-and-forth with underwriting.
Yes. Many Sacramento investors carry a conventional loan on their primary home and DSCR loans on their rentals. The two don't conflict.