Question 1

Can I use projected rent for a DSCR loan in Patterson?

Accepted Answer

Yes, lenders use either current lease agreements or an appraiser's market rent opinion. Most require 75% of the appraised rent to calculate DSCR.

Question 2

Do DSCR loans have prepayment penalties?

Accepted Answer

Many DSCR loans include prepayment penalties ranging from six months to three years. Ask your broker to shop no-penalty options if you plan to refinance soon.

Question 3

What credit score do I need for each loan type?

Accepted Answer

Conventional requires 620 minimum for investment properties. DSCR lenders typically start at 660, though some go as low as 620 with larger down payments.

Question 4

Can I buy multiple Patterson properties using DSCR loans?

Accepted Answer

Yes, DSCR loans don't count against conventional loan limits. Investors often use DSCR after hitting Fannie Mae's 10-property cap on conventional financing.

Question 5

How much rent do I need to qualify for a DSCR loan?

Accepted Answer

Most lenders want rent equal to or greater than the full mortgage payment including taxes and insurance. A 1.0 DSCR covers the payment; 1.25+ gets better pricing.

Question 6

Will conventional or DSCR rates drop if the Fed cuts later this year?

Accepted Answer

Both loan types typically track Fed policy, but Fed officials expect cuts later rather than sooner. Rate changes also depend on broader market conditions beyond Fed decisions.

Conventional vs DSCR Loans in Patterson: Which Fits Your Investment Strategy?