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in Dorris, CA
Dorris buyers face a clear split: conventional loans for primary homes or DSCR loans for rental properties. Your financing path depends entirely on whether you plan to live in the property or collect rent checks.
Conventional loans require W-2 income and strong credit. DSCR loans ignore your tax returns and qualify you on rental income alone. Most Siskiyou County borrowers need one or the other—rarely both.
Conventional loans are the standard for owner-occupied homes in Dorris. You need a 620+ credit score, verifiable income, and typically 3-5% down for a primary residence. Rates stay competitive because Fannie Mae and Freddie Mac back these mortgages.
These loans work best for W-2 earners buying a home to live in. Your debt-to-income ratio matters—lenders cap it around 50%. Tax returns, pay stubs, and bank statements all get reviewed during underwriting.
DSCR loans qualify you on property cash flow, not your W-2. Lenders calculate a ratio: monthly rent divided by monthly mortgage payment. A 1.0 DSCR means rent covers the mortgage. Most lenders want 1.2 or higher for approval.
These loans require 20-25% down and accept credit scores as low as 660. No tax returns, no pay stubs, no employment verification. You could show zero personal income and still close if the property rents high enough.
Conventional loans cost less upfront and offer better rates—typically 0.5-1% lower than DSCR. But you must prove personal income and occupy the home. DSCR loans start around 7-8% but let you skip income docs entirely if the property cash flows.
Down payments split sharply. Conventional allows 3% down for primary homes. DSCR demands 20-25% because investment properties carry more risk. Closing costs run similar, but DSCR loans often charge higher origination fees.
Choose conventional if you're buying a home to live in or have clean W-2 income. The lower rates and down payments make it the obvious pick for Dorris primary residences. Most traditional buyers save thousands over the loan term with conventional financing.
Pick DSCR if you're buying a rental property and want to avoid income verification. Self-employed borrowers and real estate investors use these loans to scale portfolios without showing tax returns. You pay more for that flexibility, but it beats being declined for low reported income.
No. DSCR loans only finance investment properties. You must use conventional or government-backed loans for homes you plan to occupy.
Conventional loans approve faster with clean income docs. DSCR loans skip income verification but require properties to cash flow at 1.2 DSCR or higher.
Expect DSCR rates 0.5-1% higher than conventional. Rates vary by borrower profile and market conditions, but the gap reflects non-QM pricing.
You can refinance from DSCR to conventional once you meet income verification requirements. Most investors keep DSCR loans on rentals and use conventional for personal homes.
Conventional offers renovation loans like HomeStyle. DSCR lenders require rentable condition at closing—no major rehabs allowed during the loan process.