Question 1

Can I use a DSCR loan to buy a primary residence?

Accepted Answer

No. DSCR loans are for investment properties only. For a home you'll live in, you need a conventional or government-backed loan.

Question 2

What credit score do I need for a DSCR loan?

Accepted Answer

Most DSCR lenders want a 680 or higher. Some go to 640, but rates climb as the score drops.

Question 3

How is the DSCR ratio calculated?

Accepted Answer

Divide the property's gross monthly rent by the full monthly mortgage payment. A ratio of 1.0 means rent exactly covers the payment.

Question 4

Which loan has the lower interest rate?

Accepted Answer

Conventional loans typically carry lower rates than DSCR. Rates vary by borrower profile and market conditions for both products.

Question 5

Do DSCR loans require tax returns?

Accepted Answer

No tax returns required. Lenders use a rent schedule or lease agreement to verify the property's income instead.

Question 6

Can I finance multiple rentals with DSCR?

Accepted Answer

Yes. DSCR lenders often allow multiple properties. Conventional financing caps get tighter after four financed properties.

Conventional vs DSCR Loans in Port Hueneme, CA