Question 1

Can I use a DSCR loan for a primary residence?

Accepted Answer

No. DSCR is investment property only. For a home you plan to live in, you need conventional or a government-backed loan.

Question 2

What credit score do I need for a DSCR loan?

Accepted Answer

Most DSCR lenders require 620–640 minimum. Higher scores get better rates, just like conventional.

Question 3

Do DSCR loans require a down payment?

Accepted Answer

Yes. Expect 20–25% down minimum on most DSCR products. Some lenders require more for lower DSCR ratios.

Question 4

Which loan has a lower interest rate?

Accepted Answer

Conventional rates are typically lower for qualified borrowers. DSCR carries a premium due to its non-QM structure. Rates vary by borrower profile and market conditions.

Question 5

Can an LLC take out a DSCR loan?

Accepted Answer

Yes. DSCR lenders commonly lend to LLCs. That's one reason investors prefer it over conventional for rental portfolios.

Question 6

What if my rental income barely covers the mortgage?

Accepted Answer

A DSCR below 1.0 means the rent doesn't cover the payment. Most lenders won't approve that — some will at higher rates and larger down payments.

Conventional vs DSCR Loans in Lemon Grove