Question 1

Can I get a DSCR loan with no rental income history?

Accepted Answer

Yes. DSCR loans use market rent analysis for the subject property, not your rental history. Lenders evaluate what the South San Francisco property should rent for based on comparable rentals.

Question 2

Are DSCR loan rates much higher than conventional rates?

Accepted Answer

DSCR rates typically run 0.5-1.5% higher than conventional loans. Rates vary by borrower profile and market conditions. The premium reflects the flexibility and reduced documentation requirements.

Question 3

Do I need to occupy the property with either loan type?

Accepted Answer

Neither loan requires owner occupancy. Both conventional investment property loans and DSCR loans are designed for rentals. DSCR loans are exclusively for non-owner-occupied properties.

Question 4

Which loan has stricter credit requirements?

Accepted Answer

Conventional loans typically require 680+ credit scores. DSCR loans may accept scores as low as 640-660, though better credit yields better rates. Each lender sets specific minimums.

Question 5

Can I refinance from conventional to DSCR later?

Accepted Answer

Absolutely. Many investors refinance conventional loans to DSCR to free up their debt-to-income ratio for additional purchases. This strategy enables continued portfolio expansion.

Conventional vs DSCR Loans: Which South San Francisco Investment Strategy Wins?