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in Dinuba, CA
Dinuba investors face a clear choice: qualify with your W-2 income or let the rental property qualify itself. Conventional loans work for owner-occupants and some investors with clean tax returns.
DSCR loans ignore your personal income entirely. They approve based on rent covering the mortgage payment. That distinction changes everything about how you qualify and what properties make sense.
Conventional loans follow Fannie Mae and Freddie Mac guidelines. You need 620+ credit, documented income, and down payments from 3% (owner-occupied) to 15-25% (investment properties).
Rates sit lower than most alternatives because agencies back these loans. Investment property rates run about 0.5-0.75% higher than owner-occupied rates. You'll pay PMI under 20% down on primary homes.
These loans shine for W-2 earners buying primary residences or investors with clean tax returns. Debt-to-income ratios max out around 50%, meaning your total debts can't exceed half your gross income.
DSCR loans qualify on one metric: does the rent cover the mortgage payment? Lenders calculate a ratio by dividing monthly rent by the proposed mortgage payment (including taxes and insurance).
Most lenders want a 1.0 DSCR minimum, meaning rent equals or exceeds the payment. Some go down to 0.75 DSCR if you bring more down payment. Your tax returns, W-2s, and pay stubs never enter the equation.
Expect 20-25% down minimum and rates 1-2% higher than conventional. Credit requirements typically start at 660-680. These loans work for self-employed investors, those with write-offs crushing their taxable income, or portfolio builders hitting conventional loan limits.
The qualification split defines everything. Conventional lenders scrutinize your paystubs, tax returns, and debt load. DSCR lenders order an appraisal with rent schedule and calculate whether the numbers work.
Rates and costs favor conventional by a significant margin when you qualify for both. But DSCR opens doors conventional slams shut for self-employed borrowers or investors with multiple properties.
Conventional caps investment properties at 10 financed at once. DSCR programs often allow unlimited properties. That matters in Dinuba where investors build portfolios of single-family rentals and small multifamily buildings.
Choose conventional for primary homes and when you have W-2 income with low debt-to-income ratios. The rate savings over 30 years dwarf the hassle of documentation for most owner-occupants.
Pick DSCR when you're self-employed with heavy write-offs, already own multiple financed properties, or buying pure cash flow plays where the deal makes sense at higher rates. Run the numbers on rent minus mortgage payment before falling in love with a property.
Many Dinuba investors use both: conventional for their first few rentals, then DSCR once they hit the 10-property cap or their income documentation gets complicated. We shop both options across 200+ lenders to find your best fit.
Yes, most DSCR lenders use an appraisal that includes market rent analysis. You don't need an existing tenant or lease in place at closing.
Typically 6-12 months of mortgage payments in liquid reserves. Requirements increase with lower credit scores or DSCR ratios under 1.0.
Absolutely. Investors often refinance conventional loans to DSCR when they need to free up income ratios for additional purchases.
DSCR often closes quicker since there's no income documentation to verify. Conventional takes longer when self-employment or complex income exists.
740+ credit unlocks top-tier DSCR pricing. Rates increase notably below 700, though many lenders go down to 660.