If you are self-employed and buying a rental property in California, you have two excellent non-QM options: a DSCR loan (which qualifies on the property’s rental income alone) or a bank statement loan (which qualifies on your personal business deposits). Both avoid tax returns. The right choice depends on the specific property and your financial situation.
DSCR Loan: The Property Qualifies You
A DSCR (Debt Service Coverage Ratio) loan is an investment property loan where the rental income of the property determines your eligibility — not your personal income at all. If the property’s gross rent divided by the monthly PITI payment equals 1.0 or higher, you qualify.
Example: Property rents for $4,500/month. PITI is $4,200/month. DSCR = 4,500 / 4,200 = 1.07. Approved.
Best for: Investment properties in strong rental markets, borrowers who want to keep their personal income out of the qualification entirely, investors buying multiple properties (no DTI consideration).
Bank Statement Loan on an Investment Property
A bank statement loan can also be used to purchase investment property, using your business or personal deposits as income documentation. You would still need to qualify using your total debt-to-income ratio, which includes the new mortgage payment plus all other debts.
Best for: Investment properties in weaker rental markets where rent may not cover the mortgage at 1.0 DSCR, or when you want access to more buying power by including your personal income in the equation.
Key Differences
| Feature | DSCR Loan | Bank Statement (Investment) |
|---|---|---|
| Qualifying factor | Property rental income | Your bank deposits |
| Personal income needed? | No | Yes |
| Min down payment | 20% | 20-25% |
| Min DSCR | 0.75-1.0 (lender dependent) | N/A |
| Property types | 1-4 units, STR, commercial | 1-4 units typically |
| Number of properties | No cap (no personal DTI) | Subject to DTI limits |
Which Should You Choose?
If the property you are buying has strong rental income and a DSCR above 1.0, the DSCR loan is usually simpler and keeps your personal financial picture separate. If the rental income is modest or you need your personal income to support the payment, a bank statement loan on the investment property may be the path.
Call (800) 239-1103 — we will analyze the property and your income and recommend the best program.
Related: Self-employed mortgage hub | DSCR loan guide | Bank statement loans
DiVita Home Finance, Inc. | NMLS #323700 | Equal Housing Lender | Licensed in California
About DiVita Home Finance
DiVita Home Finance is a small, family-owned mortgage company based in Marin County, California. When you call, you speak directly with Michael DiVita — the owner — not a call center, not an out-of-state rep, not someone reading from a script. We’re here for a low-key, no-obligation conversation about your situation.
We take your privacy seriously. We will never sell your information to third-party lenders or lead generation companies — unlike many of the large mortgage platforms. Your inquiry stays with us, period.
📞 Call: (800) 239-1103 | 💬 Text Michael directly: (310) 849-9124
