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in Dixon, CA
Dixon sits at a crossroads between Bay Area investors seeking cash flow and local buyers wanting stable homeownership. Your loan choice depends on one question: are you moving in or collecting rent?
Conventional loans serve owner-occupants and some investors willing to document their income. DSCR loans ignore your W-2 entirely and qualify you on the property's rental income alone.
Conventional loans offer the lowest rates in Dixon when you're buying a primary residence or can document steady income. You need 620+ credit for most programs, though 740+ unlocks the best pricing.
Investment properties work on conventional loans with 15-25% down, but you'll document two years of income and show your debt-to-income ratio stays under 45%. Many self-employed borrowers struggle with that income verification.
DSCR loans qualify Dixon investors based solely on whether the rent covers the mortgage payment. Lenders calculate a ratio: monthly rent divided by your total housing payment including taxes and insurance.
You need a DSCR of 1.0 or higher to qualify at standard rates. Below 1.0, rates increase but deals still close. No tax returns, no W-2s, no employment verification—just an appraisal showing market rent for the property.
The rate gap matters. Conventional loans in Dixon price around 6.5-7% for well-qualified borrowers, while DSCR loans start around 7.5-8.5%. That spread costs about $150 monthly per $300k borrowed.
Income verification creates the real divide. Conventional requires two years of tax returns showing consistent earnings. DSCR requires a lease agreement or appraiser's rent estimate—nothing about your personal finances enters the equation.
Choose conventional if you're buying a primary residence in Dixon or can easily document two years of stable income. The rate advantage saves thousands yearly and lower down payments preserve your capital.
Choose DSCR if you're acquiring rental property and your tax returns don't reflect your true cash flow—common for business owners writing off expenses. The higher rate becomes irrelevant if conventional lenders won't approve you at all.
No. DSCR loans only work for investment properties generating rental income. Primary residences require conventional, FHA, or other owner-occupant loan programs.
Most lenders want 1.0 or higher, meaning rent covers the full mortgage payment. Below 1.0 still works but expect higher rates and larger down payments.
Yes, but most lenders cap you at 4-10 financed properties. DSCR loans have no portfolio limits since they don't consider your other debt obligations.
Both take 25-35 days typically. DSCR can be slightly faster since there's no employment verification, but appraisal timing affects both equally.
Yes. Many investors start with conventional for better rates, then refinance to DSCR when acquiring more properties and hitting lender portfolio limits.