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in Woodlake, CA
Woodlake buyers face a clear fork: conventional financing for owner-occupied homes or DSCR loans for rental properties. The right path depends entirely on how you plan to use the property.
Conventional loans scrutinize your W-2 income and tax returns. DSCR loans ignore your personal finances and qualify you based solely on the property's rent potential.
Conventional loans are the standard mortgage backed by Fannie Mae or Freddie Mac. You need a 620+ credit score, stable employment history, and a debt-to-income ratio under 50%.
These loans offer the lowest rates in the market. They work for primary homes, second homes, and investment properties—but you'll always need to document your personal income.
DSCR loans flip the script for Woodlake investors. Lenders calculate the property's monthly rent divided by its monthly debt payment—that ratio determines approval, not your tax returns.
You need at least 20% down and a 680+ credit score. The property must generate enough rent to cover its mortgage payment, ideally with a 1.25x cushion.
The income verification split is everything. Conventional loans pull two years of tax returns and verify employment. DSCR loans never ask for a pay stub—they order a rent analysis from an appraiser instead.
Rates vary by borrower profile and market conditions, but expect DSCR rates to run 1-2% higher than conventional. That's the cost of skipping income documentation.
Down payment requirements differ sharply. Conventional loans allow 3% down for owner-occupants. DSCR loans require 20-25% down across the board.
Pick conventional if you're buying a Woodlake home to live in or have clean W-2 income you can document. The lower rates and down payment options make it the obvious choice for primary residences.
Choose DSCR if you're a real estate investor with income that's tough to document—self-employed, retired, or owning multiple properties. It works when the rental numbers make sense but your tax returns don't show enough income.
Most investors hit DSCR loans after they own 4-10 conventional mortgages and Fannie Mae won't finance more. It's also the play for borrowers who write off too much income to qualify conventionally.
No. DSCR loans only finance investment properties. You must use conventional financing for homes you plan to occupy.
Most lenders require 1.0 minimum, meaning rent covers the mortgage payment. A 1.25 ratio gets better pricing and easier approval.
No. Both loan types report as mortgages on your credit report. The difference is purely in how lenders qualify you.
You'd refinance from one to the other. That only makes sense if your financial situation changed and DSCR now offers better qualification odds.
Conventional loans have no minimum. DSCR lenders typically require $75k-$100k loan amounts, which can limit options on cheaper Tulare County properties.