Question 1

Can I use a DSCR loan to buy a primary residence in Lompoc?

Accepted Answer

No. DSCR loans are investment property only. For a primary residence, you need conventional or a government-backed loan.

Question 2

What credit score do I need for each loan?

Accepted Answer

Conventional lenders typically require 620+. DSCR lenders usually want 640-680 minimum, sometimes higher.

Question 3

Do DSCR loans require tax returns?

Accepted Answer

No. Lenders qualify you on the rental income, not personal income. Tax returns aren't part of the file.

Question 4

Which loan has a lower interest rate?

Accepted Answer

Conventional rates are lower. DSCR loans price higher because they carry more lender risk. Rates vary by borrower profile and market conditions.

Question 5

How much do I need to put down on a DSCR loan?

Accepted Answer

Most DSCR lenders require 20-25% down. Conventional loans can go as low as 3-5% for qualified buyers.

Question 6

Can a self-employed borrower use a conventional loan in Lompoc?

Accepted Answer

Yes, but lenders will require two years of tax returns. If write-offs reduce your net income significantly, DSCR may be easier.

Conventional vs DSCR Loans in Lompoc, CA