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in Davis, CA
Davis borrowers who don't fit traditional lending boxes have two powerful non-QM options. Bank Statement Loans serve self-employed professionals, while DSCR Loans help real estate investors qualify using rental income.
Both programs skip W-2s and tax returns, but they serve different purposes. Understanding which matches your situation saves time and positions you for approval.
Bank Statement Loans qualify you using 12 to 24 months of personal or business bank deposits. Lenders calculate your income from average monthly deposits, making these ideal for business owners, freelancers, and gig workers.
This program works for primary residences, second homes, or investment properties. You'll need reasonable credit (typically 620+) and some down payment, but your income doesn't need to show on a W-2.
Davis has strong self-employment sectors including consultants, healthcare providers, and tech contractors. These borrowers often write off substantial business expenses, making their tax returns look smaller than their actual earning power.
DSCR Loans ignore your personal income completely. Instead, lenders qualify the property based on whether rental income covers the mortgage payment, taxes, and insurance.
The Debt Service Coverage Ratio compares monthly rent to monthly housing costs. A ratio above 1.0 means the property pays for itself. Many lenders accept ratios as low as 0.75 with compensating factors.
These loans only work for investment properties, never owner-occupied homes. Davis rental properties near UC Davis can generate strong cash flow, making DSCR an attractive option for local investors.
The fundamental difference is what gets analyzed. Bank Statement Loans examine your cash flow through deposits. DSCR Loans examine the property's ability to generate rent that covers expenses.
Bank Statement Loans work for any property you want to buy or refinance. DSCR Loans strictly serve investors buying or refinancing rental properties. If you're purchasing a Davis home to live in, Bank Statement is your only choice between these two.
Documentation differs substantially. Bank Statement requires months of deposits and explanations for large transactions. DSCR needs a lease agreement or rental appraisal, plus property insurance quotes. Neither requires tax returns or pay stubs.
Choose Bank Statement Loans if you're self-employed and buying a home to live in, or if you want flexibility across property types. This works for Davis professionals whose bank deposits tell a better story than their 1040s.
Choose DSCR if you're building a rental portfolio and want to qualify without income verification. Davis investors eyeing properties near campus or in established neighborhoods benefit when strong rents justify the purchase.
Some borrowers qualify for both programs on investment properties. In that case, compare the rates and terms your lender offers. Rates vary by borrower profile and market conditions, so actual costs depend on your specific scenario.
Yes. Bank Statement Loans work for investment properties, second homes, and primary residences. DSCR restricts to investment properties only.
Rates vary by borrower profile and market conditions. Both are non-QM products with similar pricing, though your specific credit, down payment, and property details determine actual costs.
Both typically require 15-25% down for investment properties. Bank Statement Loans may go lower on primary residences. Exact requirements depend on your overall profile.
No. Bank Statement uses your deposits, DSCR uses property rent. Choose one program based on your situation, or consider conventional financing if you qualify.
DSCR often closes slightly faster since it skips personal income analysis. Both typically close in 30-45 days with proper documentation and responsive parties.