Question 1

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

Accepted Answer

Lenders accept appraisal rent estimates for vacant properties. If you have a signed lease, they'll use actual rent only if it's lower than the appraisal figure.

Question 2

Do DSCR loans require reserves after closing?

Accepted Answer

Most lenders want six to twelve months of mortgage payments in liquid reserves. Higher DSCR ratios sometimes reduce reserve requirements.

Question 3

Can I buy a fixer-upper with a DSCR loan?

Accepted Answer

Properties must be rent-ready at closing. Major rehabs require bridge or hard money financing first, then refinance into DSCR once the property is stabilized.

Question 4

How do lenders treat multi-unit properties in Goleta?

Accepted Answer

Duplexes through fourplexes qualify if each unit generates rent. Expect 25-30% down and slightly higher rates than single-family DSCR loans.

Question 5

What happens if my DSCR is below 1.0 but I have strong credit?

Accepted Answer

Some lenders approve ratios as low as 0.75 with compensating factors like 740+ credit and 30% down. Rates jump significantly below 1.0 DSCR.

DSCR Loans in Goleta: Qualify Real Estate Investors By Property Cash Flow, Not W-2 Income