Question 1

Can I use projected rental income for a DSCR loan in Colma?

Accepted Answer

Appraisers determine rental income using comparable properties, not your projections. They analyze similar rentals in Colma and surrounding San Mateo County areas. Your personal rent estimates don't affect qualification.

Question 2

What DSCR ratio do I need to qualify in San Mateo County?

Accepted Answer

Most lenders require 1.0 minimum, meaning rent equals the mortgage payment. Ratios of 1.25 or higher unlock better rates and terms. Higher property taxes in the county make achieving strong ratios more challenging.

Question 3

How much down payment do DSCR loans require for Colma investment properties?

Accepted Answer

Expect 20-25% down for properties with strong DSCR ratios and good credit. Borderline deals may require 30% down. Larger down payments improve your DSCR ratio by reducing the monthly payment.

Question 4

Do DSCR loans work for short-term rentals in Colma?

Accepted Answer

Some DSCR lenders accept short-term rental income, but many restrict to traditional long-term leases. Check local Colma regulations on short-term rentals before pursuing this strategy. Documentation requirements vary significantly.

Question 5

How do DSCR loan rates compare to conventional investment property loans?

Accepted Answer

Rates typically run 1-2% higher than conventional investor loans. The premium pays for not providing income documentation. Stronger DSCR ratios, higher credit scores, and larger down payments reduce the rate spread.

DSCR Loans in Colma: Finance Investment Properties Based on Rental Income, Not W-2s