Question 1

Can I use a DSCR loan for a primary home in Gilroy?

Accepted Answer

No. DSCR loans are for investment properties only. You'll need a conventional or government-backed loan for a home you plan to live in.

Question 2

What DSCR ratio do lenders require?

Accepted Answer

Most lenders want a ratio of 1.0 or higher. That means the rent covers the full mortgage payment each month.

Question 3

Does a DSCR loan require tax returns?

Accepted Answer

No. That's the point. Lenders skip personal income docs entirely and focus on the rental property's income instead.

Question 4

Which loan has a lower interest rate?

Accepted Answer

Conventional typically prices better for strong borrowers. DSCR carries a premium for the no-income-doc flexibility. Rates vary by borrower profile and market conditions.

Question 5

Can I buy a multi-unit property in Gilroy with either loan?

Accepted Answer

Yes, both can work for 2–4 unit properties. DSCR is often simpler for pure investment purchases with no owner-occupancy.

Question 6

What credit score do I need for each loan?

Accepted Answer

Conventional allows as low as 620. DSCR lenders typically require 680 or higher, though some go lower with compensating factors.

Conventional vs DSCR Loans in Gilroy, CA