Question 1

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

Accepted Answer

No. DSCR loans are for investment properties only. For a primary home, you'll need conventional or government-backed financing.

Question 2

What credit score do I need for each loan?

Accepted Answer

Conventional lenders typically require 620 minimum. Most DSCR lenders want 680 or higher due to the non-QM risk profile.

Question 3

Which loan has a lower interest rate?

Accepted Answer

Conventional rates are generally lower. DSCR is a non-QM product, so lenders price in more risk. Rates vary by borrower profile and market conditions.

Question 4

Can I hold a DSCR loan in an LLC?

Accepted Answer

Yes — most DSCR lenders allow LLC vesting. Conventional loans typically require the borrower to hold title personally.

Question 5

How does the DSCR ratio work?

Accepted Answer

Lenders divide the property's monthly rent by the total mortgage payment. A ratio of 1.0 or above usually meets the minimum threshold.

Question 6

Do both loans have conforming loan limits?

Accepted Answer

Conventional loans follow FHFA conforming limits for Santa Clara County. DSCR lenders set their own limits and often go higher.

Conventional vs DSCR Loans in Milpitas, CA