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in Tracy, CA
Tracy's rental market attracts both traditional buyers and serious investors. Conventional loans work great for owner-occupants and light investors who qualify through W-2 income.
DSCR loans qualify you based on rent collected, not your tax returns. Most Tracy investors with multiple properties or complex income use DSCR to scale their portfolios.
Conventional loans offer the lowest rates for borrowers with clean W-2 income and good credit. You need 620+ credit and typically 15-20% down for investment properties in Tracy.
Lenders verify your income, assets, and debt-to-income ratio. Most Tracy buyers use conventional for their first rental property or primary residence before switching to DSCR.
DSCR loans skip personal income verification entirely. The property must generate enough rent to cover the mortgage payment, typically 1.0x to 1.25x debt coverage.
Tracy investors with multiple properties or self-employment income use DSCR to avoid maxing out their debt-to-income ratios. You can close faster without chasing two years of tax returns.
Conventional loans beat DSCR on rate by 0.5-1% but cap you at 10 financed properties. DSCR has no property limit and approves based strictly on the rental income math.
Tracy properties averaging $1,800-$2,200 monthly rent usually hit DSCR requirements. Conventional requires your personal income to support all mortgages, which becomes impossible after 3-4 properties.
Use conventional for your first Tracy rental if you have W-2 income and want the best rate. Switch to DSCR once you own 2-3 properties or run your own business.
Most serious investors eventually move to DSCR exclusively. It removes income as a bottleneck and lets you scale based on deal quality, not your tax return.
Yes, but conventional usually offers a better rate. DSCR makes sense if your income is hard to document or you plan to buy multiple properties quickly.
Most lenders require 1.0x to 1.25x debt coverage. That means monthly rent must equal or exceed 100-125% of the mortgage payment.
Conventional caps at 10 financed properties. DSCR has no limit as long as each property hits the required debt coverage ratio.
DSCR typically closes in 21-30 days because it skips income verification. Conventional takes 30-45 days with full documentation requirements.
Absolutely. Most investors use conventional for their first 1-2 properties, then switch to DSCR to avoid debt-to-income ratio limits.