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Gilroy sits at the southern edge of Santa Clara County. Rents here are strong relative to purchase prices compared to San Jose or Sunnyvale.
That rent-to-price ratio matters for DSCR loans. The property's cash flow is what gets you approved — not your tax returns.
660 (varies by lender)
Min Credit Score
1.0 (some go to 0.75)
Min DSCR Ratio
20-25% typical
Down Payment
30-year fixed available
Loan Term
Fixed or ARM options
Rate Type
DSCR Loans in Gilroy
DSCR stands for Debt Service Coverage Ratio. Lenders divide the property's gross rent by its monthly mortgage payment.
Most lenders want a DSCR of 1.0 or higher. That means rent covers the full payment. Some lenders will go below 1.0 with a larger down payment.
Local decision guide
Use this guide to connect dscr loans eligibility, lender expectations, and local market factors before comparing payment options in Gilroy.
Gilroy sits at the southern edge of Santa Clara County. Rents here are strong relative to purchase prices compared to San Jose or Sunnyvale.
That rent-to-price ratio matters for DSCR loans. The property's cash flow is what gets you approved — not your tax returns.
DSCR stands for Debt Service Coverage Ratio. Lenders divide the property's gross rent by its monthly mortgage payment.
DSCR loans are non-QM products. Most banks don't offer them. You need access to wholesale non-QM lenders to find competitive terms.
Rates vary across lenders more than conventional loans do. Shopping 5-6 lenders on a DSCR deal can save you meaningful money. Rates vary by borrower profile and market conditions.
The most common mistake investors make: assuming any rental income qualifies. Lenders use the appraiser's market rent opinion, not what your tenant pays.
If your lease is above market, lenders still use the lower appraisal figure. Get a rent schedule from a local appraiser before you fall in love with the deal.
DSCR beats conventional investor loans for self-employed borrowers. Conventional loans require two years of tax returns. DSCR skips that entirely.
Hard money loans close faster but carry higher rates and short terms. DSCR gives you a 30-year fixed with no balloon. That's the real advantage for buy-and-hold investors.
Gilroy's proximity to Morgan Hill and San Jose draws renters who want space without South Bay prices. Single-family rentals here tend to pencil well on DSCR.
Short-term rentals near the outlets or Gilroy Gardens are possible, but fewer DSCR lenders count Airbnb income. Plan for long-term rental analysis when underwriting.
Most lenders target 1.0 or above. Some go as low as 0.75 with 25-30% down and a stronger credit profile.
Yes. Most non-QM DSCR lenders allow LLC vesting. This is one of the top reasons investors prefer DSCR over conventional.
A few do, but most use long-term market rent. If you're buying an Airbnb, confirm the lender's policy before applying.
Expect 20-25% minimum. Some lenders require more if the DSCR is below 1.0 or the credit score is near the floor.
Not harder — different. DSCR ignores your personal income. The property has to carry itself. That's the tradeoff.
Single-family, 2-4 units, and some condos qualify. Commercial properties and rural land typically don't fit DSCR programs.