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in San Francisco, CA
San Francisco borrowers have unique financing needs that traditional loans often can't meet. Self-employed professionals and real estate investors need flexible income verification options.
Bank Statement Loans and DSCR Loans are both non-QM products designed for non-traditional borrowers. Each serves different purposes and borrower types in San Francisco's competitive market.
Understanding which loan fits your situation helps you move forward confidently. This comparison breaks down the key differences between these two popular alternative financing options.
Bank Statement Loans use 12 to 24 months of bank statements to verify income for self-employed borrowers. This option works well for business owners, freelancers, and contractors in San Francisco.
Instead of tax returns and W-2s, lenders analyze your deposits to calculate qualifying income. This approach helps borrowers whose tax write-offs reduce their reported income significantly.
These loans are ideal for owner-occupied homes, second homes, or investment properties. You need consistent bank deposits and reasonable debt-to-income ratios to qualify.
DSCR Loans qualify investors based on a rental property's income rather than personal income. The Debt Service Coverage Ratio measures if rent covers the mortgage payment.
Your personal income, employment, and tax returns don't matter with DSCR financing. Lenders focus entirely on the property's ability to generate sufficient rental income.
These loans are exclusively for investment properties, not primary residences. San Francisco investors use DSCR loans to grow portfolios without income documentation hassles.
The main difference lies in what income the lender evaluates. Bank Statement Loans analyze your personal or business income through deposits. DSCR Loans only consider the rental property's income potential.
Property type eligibility varies significantly between these options. Bank Statement Loans work for homes you'll live in or rent out. DSCR Loans are strictly for rental investment properties.
Your qualification strategy differs with each loan type. Bank Statement borrowers need consistent deposit history and manageable debt ratios. DSCR borrowers need properties with strong rental income relative to the mortgage payment.
Choose Bank Statement Loans if you're self-employed and buying a home to live in. This option also works for investors who want to use their business income to qualify.
DSCR Loans fit investors focused on building rental portfolios in San Francisco. If you want financing without sharing personal financial details, DSCR streamlines the process significantly.
Consider your property plans and income situation carefully. A mortgage broker can analyze your specific scenario and recommend the best fit. Rates vary by borrower profile and market conditions for both options.
Yes, both work for investment properties. Bank Statement Loans require your personal income to qualify. DSCR Loans qualify based solely on the property's rental income.
DSCR Loans are simpler if the property has strong rental income. Bank Statement Loans require consistent deposits and debt-to-income review but work for primary homes too.
Non-QM loans typically have higher rates than conventional financing. Rates vary by borrower profile and market conditions, so compare offers from multiple lenders.
Bank Statement Loans need 12-24 months of statements. DSCR Loans need rent documentation and property analysis but skip personal tax returns and employment verification.
Yes, you can refinance between loan types if you meet qualification standards. Your property use and financial situation determine which option works best at refinance time.