Question 1

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

Accepted Answer

Yes. Many DSCR lenders accept short-term rental income projections. You'll typically need an Airbnb or VRBO income estimate from a third-party service.

Question 2

Which loan has the lower interest rate?

Accepted Answer

Conventional rates are lower for qualified borrowers. DSCR loans carry a premium for the reduced documentation and investor risk. Rates vary by borrower profile and market conditions.

Question 3

Can an LLC get a conventional loan?

Accepted Answer

No. Conventional loans require individual borrower ownership. If you want the property in an LLC, DSCR is the standard path.

Question 4

What credit score do I need for a DSCR loan?

Accepted Answer

Most DSCR lenders require at least a 640-660 credit score. Stronger scores get better rates and lower reserve requirements.

Question 5

Do both loans work for investment properties?

Accepted Answer

Conventional allows investment properties but requires full income documentation. DSCR was built specifically for investors and skips personal income review entirely.

Question 6

How much down payment does each loan require?

Accepted Answer

Conventional requires 15-25% down on investment property. DSCR typically requires 20-25% down depending on the lender and property type.

Conventional vs DSCR Loans in Cloverdale, CA