Question 1

Can I use a DSCR loan to buy a short-term rental in Santa Cruz?

Accepted Answer

Yes. Many DSCR lenders allow short-term rentals. Some use projected Airbnb income to calculate the DSCR ratio.

Question 2

What credit score do I need for a conventional loan?

Accepted Answer

Most conventional lenders require at least 620. Better rates kick in at 740 and above.

Question 3

Do DSCR loans cost more than conventional loans?

Accepted Answer

Yes, rates are typically higher. Investors accept that trade-off to avoid income documentation requirements. Rates vary by borrower profile and market conditions.

Question 4

Can I buy under an LLC with a DSCR loan?

Accepted Answer

Yes. DSCR loans allow LLC vesting. Conventional loans do not permit LLC ownership.

Question 5

Which loan works for a self-employed borrower in Santa Cruz?

Accepted Answer

DSCR is often the cleaner path. It skips tax return review entirely if you're buying an investment property.

Question 6

What down payment does a DSCR loan require?

Accepted Answer

Expect 20-25% down minimum. Some lenders push higher for vacation rental properties.

Conventional vs DSCR Loans in Santa Cruz, CA