Question 1

Can I use a DSCR loan for 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 each loan?

Accepted Answer

Conventional typically requires 620 or higher. DSCR lenders often want 660-680 minimum, sometimes higher for better pricing.

Question 3

Do DSCR loans require tax returns?

Accepted Answer

No tax returns needed. The lender qualifies the loan based on the property's rental income, not your personal finances.

Question 4

Which loan has the lower interest rate?

Accepted Answer

Conventional loans generally price lower. DSCR loans carry a rate premium for the flexible qualifying. Rates vary by borrower profile and market conditions.

Question 5

How is the DSCR ratio calculated?

Accepted Answer

Divide monthly gross rent by the total monthly mortgage payment. A ratio of 1.0 means rent equals the payment. Above 1.0 is preferred.

Question 6

Can I buy a multi-unit property with either loan?

Accepted Answer

Yes to both, with conditions. Conventional allows 2-4 units with standard guidelines. DSCR lenders often go up to 4-8 units depending on the program.

Conventional vs DSCR Loans in West Sacramento