Question 1

What DSCR ratio do I need to qualify in Hillsborough?

Accepted Answer

Most lenders require 1.0 minimum, meaning rent covers your full payment. We can find 0.8 ratio lenders but rates jump 0.5-1.0% higher.

Question 2

Can I use projected rent or does the property need a tenant?

Accepted Answer

Vacant properties qualify using appraiser's market rent opinion. Active leases work too but can't exceed comparable rent data by more than 10%.

Question 3

How does DSCR work if I own the property free and clear?

Accepted Answer

Same process. We calculate DSCR using your proposed new loan payment, not your current zero payment. The property still needs income to cover the debt.

Question 4

Do I need reserves for a DSCR loan in Hillsborough?

Accepted Answer

Most lenders want 6-12 months of mortgage payments in reserves. Higher loan amounts or lower credit scores push this to 12 months minimum.

Question 5

Can I use a DSCR loan on a property I live in part-time?

Accepted Answer

No. DSCR loans require full investment property status. If you occupy it even occasionally, you need owner-occupied financing with income docs.

Question 6

How long does DSCR underwriting take compared to conventional loans?

Accepted Answer

Faster on documentation but Hillsborough appraisals add time. Expect 35-45 day closes versus 30 days for conventional loans in simpler markets.

DSCR Loans in Hillsborough: Income-Free Qualification for Investment Properties