Question 1

Can I use DSCR for my primary residence in Arroyo Grande?

Accepted Answer

No, DSCR loans require the property to be an investment. You must generate rental income to qualify based on debt service coverage ratio.

Question 2

What credit score do I need for each loan type?

Accepted Answer

Conventional loans require 620 minimum, often 680+ for best rates. DSCR lenders typically want 660+ but focus more on property cash flow than credit.

Question 3

How much does DSCR cost compared to conventional?

Accepted Answer

DSCR rates run 0.75% to 1.5% higher than conventional. On a $500K loan, that's roughly $250 to $400 more per month for the income flexibility.

Question 4

Can I buy multiple Arroyo Grande rentals with DSCR loans?

Accepted Answer

Yes, DSCR loans don't count against your debt ratio. You can close multiple properties simultaneously if each one cash flows at 1.0x or better.

Question 5

Which loan closes faster in San Luis Obispo County?

Accepted Answer

DSCR loans often close quicker since there's no income verification. Conventional takes longer due to employment checks and debt ratio calculations.

Conventional vs DSCR Loans in Arroyo Grande: Which Fits Your Strategy?