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in East Palo Alto, CA
East Palo Alto investors face a choice: qualify with personal income or let the property speak for itself. Conventional loans demand W-2s and tax returns. DSCR loans care only about rent coverage.
The Fed is expected to cut rates later this year, but not immediately. Smart buyers lock strategies now. Your borrower profile determines which loan type wins in this market.
Conventional loans in San Mateo County require 620+ credit for most borrowers. You'll show two years of W-2s, tax returns, and proof of reserves. Down payments start at 3% for primary homes, 15% for investment properties.
Rates hit 6.01% on average as of February 2026 — near four-year lows. These loans cap at conforming limits unless you go jumbo. Expect full income documentation and debt-to-income ratio scrutiny below 50%.
DSCR loans skip personal income entirely. Lenders measure one thing: does monthly rent cover the mortgage payment? You need a DSCR ratio of 1.0 or higher — meaning rent equals or exceeds the full PITIA payment.
Minimum 20% down for most deals, 25% for better pricing. Credit scores start at 620, but 680+ gets you competitive rates. No tax returns, no W-2s, no explanation of employment gaps. The property qualifies you.
Conventional loans price lower for strong W-2 borrowers. DSCR loans cost 0.5-1.5% more in rate but eliminate income documentation. Conventional caps DTI at 50%. DSCR ignores your DTI completely.
Down payment splits matter. Conventional allows 15% down on investment properties. DSCR starts at 20%, often 25% for rate breaks. Portfolio landlords with multiple properties hit conventional loan limits fast. DSCR loans have no such cap.
Choose conventional if you're a W-2 employee with clean tax returns and low DTI. You'll lock the lowest rate. East Palo Alto investors buying their first rental with strong personal income save thousands over 30 years.
Pick DSCR if you're self-employed, own multiple properties, or show minimal taxable income. The higher rate costs less than losing a deal to income documentation delays. Rates vary by borrower profile and market conditions.
No. DSCR loans fund investment properties only. You need conventional, FHA, or another owner-occupied product for a primary home.
Most lenders require 1.0 or higher. Monthly rent must cover the full mortgage payment including taxes and insurance.
Many do. Conventional loans rarely carry prepayment penalties. Review loan terms before closing.
Yes, if you meet conventional income and credit requirements. Refinancing saves money if your income profile improves.
DSCR loans often close in 21 days. Conventional takes 30-45 days due to income verification steps.