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in Burlingame, CA
Burlingame investors face a choice: traditional conventional financing or income-based DSCR loans. Your employment situation and property cash flow determine which path works.
Conventional loans offer lower rates but require W-2 income verification. DSCR loans skip the tax returns and qualify you based solely on rental income potential.
With rate volatility expected through 2026, understanding these options matters more than ever. One loan type might save you thousands in interest, while the other might actually get you approved.
Conventional loans deliver the lowest rates available for investment properties in Burlingame. You'll need steady W-2 income, strong credit, and typically 20-25% down for investor properties.
Fannie Mae and Freddie Mac cap how many financed properties you can hold. After 10 properties, conventional financing stops unless you pay off loans or switch lenders.
Debt-to-income ratio matters heavily here. Lenders want to see that your total monthly obligations stay under 45-50% of gross income, including the new property payment.
DSCR loans ignore your tax returns entirely. Underwriters look at one number: does the monthly rent cover the mortgage payment plus property costs?
Most lenders want a DSCR of 1.0 or higher, meaning rent equals or exceeds the full housing payment. Some will go to 0.75 if you bring more money down.
No property count limits exist with DSCR financing. You can finance 20, 30, or 50 properties as long as each one cash flows and you have down payment funds.
Rates run 0.5-1.5% higher than conventional as of February 2026. That gap narrows when Fed cuts arrive later this year, but DSCR will always carry a premium.
Documentation separates these loans more than anything. Conventional lenders want two years of tax returns, W-2s, and full income verification. DSCR lenders want a lease agreement and rent appraisal.
Rate pricing reflects that difference. Conventional loans price like owner-occupied mortgages with an investor adjustment. DSCR loans price as non-QM products with higher base rates.
Property limits matter for portfolio investors. Conventional financing ends at 10 properties through Fannie and Freddie. DSCR loans have no cap beyond your ability to fund down payments.
Self-employed investors hit a wall with conventional loans when tax write-offs reduce reported income. DSCR eliminates that problem by ignoring personal income completely.
Choose conventional if you have W-2 income, clean tax returns, and fewer than 10 financed properties. The rate savings add up to thousands annually on Burlingame property prices.
Go DSCR when you're self-employed with heavy deductions, building a large portfolio, or lacking traditional income documentation. The rate premium buys you approval flexibility.
First-time investors with strong employment usually benefit from conventional rates. Experienced investors scaling past property limits need DSCR to keep growing.
Recent shifts in Fed policy mean both loan types will see rate changes through 2026. DSCR rates may compress toward conventional pricing if cuts arrive as forecasted, making the premium less painful.
Yes, but lenders calculate rental income conservatively. Most use 75% of projected short-term rental income when underwriting DSCR loans.
Conventional loans typically require 680+ for investment properties. DSCR loans start at 660 but better rates come at 700+.
DSCR loans usually close 5-7 days faster because they skip income verification. Expect 20-25 days vs 25-30 for conventional.
Yes, refinancing between loan types works when it makes sense. Some investors switch to DSCR after hitting the 10-property conventional limit.
Conventional covers 1-4 units. DSCR handles 1-4 units plus some 5-8 unit small apartment buildings depending on the lender.
More down payment reduces required DSCR. At 25% down most lenders want 1.0 DSCR, but at 30-35% down they'll accept 0.75-0.85.