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Morgan Hill sits in the southern end of Santa Clara County. That address alone commands strong rental demand from tech workers and families priced out of San Jose.
Investors here can build real cash flow. DSCR loans — which qualify you based on what the property earns, not your W-2 — are built for exactly this market.
680 (most lenders)
Min Credit Score
1.0 (some allow 0.75)
Min DSCR Ratio
20-25% minimum
Down Payment
Up to $3M+
Max Loan Amount
30-yr fixed available
Loan Term Options
DSCR Loans in Morgan Hill
DSCR stands for Debt Service Coverage Ratio. Lenders divide your monthly rent by your monthly mortgage payment. A ratio of 1.0 means rent covers the payment exactly.
Most lenders want a DSCR of 1.0 or higher. Some will go to 0.75 with stronger credit or a larger down payment. Expect to put down at least 20-25%.
Local decision guide
Use this guide to connect dscr loans eligibility, lender expectations, and local market factors before comparing payment options in Morgan Hill.
Morgan Hill sits in the southern end of Santa Clara County. That address alone commands strong rental demand from tech workers and families priced out of San Jose.
Investors here can build real cash flow. DSCR loans — which qualify you based on what the property earns, not your W-2 — are built for exactly this market.
DSCR stands for Debt Service Coverage Ratio. Lenders divide your monthly rent by your monthly mortgage payment. A ratio of 1.0 means rent covers the payment exactly.
DSCR is a non-QM product. Traditional banks mostly don't offer it. You need access to wholesale non-QM lenders — and there are real differences in how they price this loan.
Rate spreads between lenders on DSCR deals can be wide. One lender might price a 0.9 DSCR property as a risk; another might not blink. Shopping matters here more than on conventional deals.
The biggest mistake investors make: assuming any rent income qualifies. Lenders use market rent or actual rent — whichever is lower. Get a proper rent schedule with your appraisal.
Short-term rentals on Airbnb don't automatically count. Some DSCR lenders require long-term leases. Others accept STR income with the right documentation. Know which lender fits your strategy before you apply.
Bank Statement loans also skip W-2 income — but they qualify you on your personal deposits. DSCR ignores your personal income entirely. If the property cash flows, the loan works.
Hard money moves faster but costs more. Bridge loans are for transition periods. DSCR is your long-term hold product — 30-year fixed options exist at non-QM lenders for exactly this purpose.
Morgan Hill has a mix of single-family homes and smaller multi-units. DSCR lenders typically prefer 1-4 unit residential properties — and this market has plenty of them.
Santa Clara County property taxes will factor into your DSCR calculation. Higher taxes mean a higher monthly payment, which can compress your ratio on tighter deals. Run your numbers carefully before locking a purchase price.
No. DSCR loans don't require personal tax returns. The property's rental income drives the qualification.
Most DSCR lenders want at least 680. Higher scores get better rates. Some lenders go to 660 with a larger down payment.
Yes. Lenders use the appraiser's market rent schedule if the property is vacant. Actual lease income is used when a tenant is in place.
Some non-QM lenders accept short-term rental income. You'll need STR history or a market analysis. Not every DSCR lender allows it.
Most non-QM DSCR lenders go up to $3M or more in Santa Clara County. Loan limits depend on the lender and your DSCR ratio.
Yes. Many DSCR lenders allow LLC vesting. This is one of the few loan types where that structure is commonly accepted.