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in Santa Rosa, CA
Santa Rosa's housing market attracts both self-employed buyers and real estate investors who don't fit traditional mortgage boxes. Bank Statement and DSCR loans both skip tax returns, but they solve different problems.
Bank Statement loans verify income through deposits in your business accounts. DSCR loans ignore your income entirely and qualify you based on what the property earns in rent.
Most borrowers need one or the other, not both. Your employment structure and whether you're buying a primary home or investment property determines which path works.
Bank Statement loans use 12 to 24 months of personal or business bank deposits to calculate your qualifying income. Lenders look at your average monthly deposits and apply an expense factor, typically 25% to 50%.
This program works for entrepreneurs, freelancers, and small business owners buying a primary residence or second home in Santa Rosa. You need reasonable credit, typically 620 minimum, and 10% to 20% down.
The key advantage is proving income without showing tax returns that reflect heavy write-offs. Your actual cash flow matters more than your adjusted gross income on a 1040.
DSCR loans qualify you solely on the rental income the property generates. Lenders calculate a debt service coverage ratio by dividing monthly rent by the monthly mortgage payment (PITIA).
A DSCR of 1.0 means rent exactly covers the mortgage. Most lenders want 1.0 to 1.25 minimum. Your personal income, employment, and tax returns don't enter the equation at all.
This works exclusively for investment properties in Santa Rosa. You typically need 20% to 25% down and 640+ credit. No income verification, no employment letters, no pay stubs.
Bank Statement loans verify your ability to pay. DSCR loans verify the property's ability to pay. That's the fundamental split.
Bank Statement works for owner-occupied homes. DSCR works only for rentals. You can't use DSCR to buy a house you'll live in, and Bank Statement rarely makes sense for pure investment properties.
Documentation differs sharply. Bank Statement requires 12 to 24 months of statements and proves your business deposits. DSCR requires a lease agreement or rental appraisal and ignores your finances entirely.
Rates and terms vary by borrower profile and market conditions. DSCR loans often price slightly higher due to investment property risk, but both carry non-QM premiums over conventional loans.
Choose Bank Statement if you're self-employed and buying a home to live in around Santa Rosa. Your business shows strong deposits but your tax returns look lean due to deductions.
Choose DSCR if you're buying a rental property and don't want to document personal income. You might already own several rentals, or your W-2 income is maxed out for debt-to-income purposes.
Some borrowers qualify for both if buying a rental with strong cash flow. In that case, run both scenarios. DSCR simplifies documentation but may price higher. Bank Statement adds paperwork but could save on rate.
Technically yes, but DSCR almost always works better for pure rentals. Bank Statement makes sense only if the property's rent won't support DSCR minimums.
DSCR loans typically allow LLC vesting since they're investment-focused. Bank Statement loans usually require personal names for owner-occupied properties.
Rates vary by borrower profile and market conditions. Bank Statement often prices slightly better for strong credit, but it depends on your scenario.
Yes. Neither program requires tax returns for income verification, though lenders may request them for other underwriting purposes.
Bank Statement typically starts at 620. DSCR usually requires 640 minimum, with better pricing at 680+.
Most lenders want rent to equal or exceed 100% to 125% of the full monthly payment. Run a quick rent-to-payment ratio to see if you qualify.