Question 1

What's a debt service coverage ratio and why does it matter for DSCR loans?

Accepted Answer

DSCR is the property's gross rental income divided by total loan payments (principal, interest, taxes, insurance). Lenders want 1.25x minimum. A $3,000/month rent on a $2,400 payment = 1.25x DSCR.

Question 2

Can I get a DSCR loan with less than 20% down in Cotati?

Accepted Answer

No. DSCR loans require 20-25% down on investment properties. Some lenders offer 15% down on owner-occupied duplexes, but single-family rentals need 20% minimum. The down payment size directly affects your rate and approval odds.

Question 3

Do I need to show my personal income to qualify for a DSCR loan?

Accepted Answer

No. DSCR lenders ignore your W-2 income and focus entirely on the property's rental income. Plan on submitting 12 months of rent history or a lease, but personal tax returns are not required.

Question 4

What credit score do I need for a DSCR loan in Cotati?

Accepted Answer

Most lenders start at 680 FICO, but 700+ is preferred and gets better rates. Some portfolio lenders go down to 660 with 25% down. The property's cash flow matters more than your credit, but lenders still want to see responsible borrowing history.

Question 5

How long does DSCR underwriting take in California?

Accepted Answer

Standard DSCR takes 30-45 days. The lender orders an appraisal, verifies the rent roll, and stress-tests the property's cash flow. No-ratio DSCR may take slightly longer because the lender is taking more risk.

DSCR Loans in Cotati: Investor Financing for Rental Properties