Question 1

Can I use a DSCR loan to buy a primary home in San Jose?

Accepted Answer

No. DSCR loans are for investment properties only. You need a conventional or government-backed loan for a primary residence.

Question 2

What credit score do I need for a DSCR loan?

Accepted Answer

Most DSCR lenders want a 680 minimum. Some go lower, but the rate premium increases significantly below that threshold.

Question 3

Do DSCR loans look at my debt-to-income ratio?

Accepted Answer

No. DTI is irrelevant for DSCR loans. Lenders only care whether the property's rent covers its mortgage payment.

Question 4

Which loan type has better rates in Santa Clara County?

Accepted Answer

Conventional rates are consistently lower. DSCR lenders charge more because they skip income verification. Rates vary by borrower profile and market conditions.

Question 5

Can I use projected rent to qualify for a DSCR loan?

Accepted Answer

Some lenders accept a market rent appraisal for new rentals. Many prefer a signed lease showing actual rental income.

Question 6

What down payment does each loan require for a rental property?

Accepted Answer

Both typically require 20-25% down on investment properties. DSCR lenders sometimes require 25% depending on the loan size.

Conventional vs DSCR Loans in San Jose