Question 1

Can I use a DSCR loan to buy a primary residence?

Accepted Answer

No. DSCR loans are investment property only. For a primary home, you need a conventional or government-backed loan.

Question 2

Do DSCR loans require a minimum credit score?

Accepted Answer

Most DSCR lenders require 660 or higher. Some go down to 640 with a larger down payment.

Question 3

How is DSCR calculated?

Accepted Answer

Divide the monthly rental income by the monthly mortgage payment. A result of 1.0 or above generally satisfies lenders.

Question 4

Can a self-employed borrower use a conventional loan?

Accepted Answer

Yes, but lenders average your last two years of tax returns. Heavy write-offs can reduce your qualifying income significantly.

Question 5

Which loan has lower rates in Redlands?

Accepted Answer

Conventional rates are lower. DSCR loans carry a rate premium due to the non-QM structure. Rates vary by borrower profile and market conditions.

Question 6

Can I buy a multi-unit property with either loan?

Accepted Answer

Yes to both. Conventional allows up to 4 units if you occupy one. DSCR works on any non-owner-occupied rental.

Conventional vs DSCR Loans in Redlands, CA