Yes — you can get a DSCR loan in California with a DSCR below 1.0. These are called sub-1.0 DSCR loans or no-ratio DSCR loans, and they exist for investors who see value in a property that doesn’t yet cash flow at full qualification.
When DSCR Falls Below 1.0 in California
California’s high home prices relative to rents make sub-1.0 DSCR extremely common — especially in coastal markets. A property in the Bay Area might rent for $3,200/month but carry a $4,800/month PITIA. DSCR = 0.67. Standard programs won’t approve it. But a no-ratio DSCR program can.
Sub-1.0 DSCR Loan Requirements
| Requirement | Sub-1.0 Guideline |
|---|---|
| Min down payment | 30–35% (higher LTV = higher risk) |
| Min credit score | 700–720 (lender-dependent) |
| Reserves | 12 months PITIA (vs. 6 on standard DSCR) |
| Max loan amount | $2M–$3M on most programs |
| Property types | SFR, 2–4 units, STR (case-by-case) |
| Rate premium | 0.50%–1.50% above standard DSCR rates |
Why California Investors Use Sub-1.0 Programs
- Appreciation play — Bay Area and coastal properties appreciate 5–8% annually; negative cash flow is offset by equity gain
- Value-add opportunity — buy under-rented, renovate, raise rents to push DSCR above 1.0 within 12–24 months
- STR conversion — long-term rent doesn’t support the DSCR; plan to convert to Airbnb where STR income would push DSCR above 1.25
- 1031 exchange deadline — investor must close in 45-day identification window; sub-1.0 is the only available financing
How to Improve DSCR Before Applying
- Increase down payment to reduce PITIA
- Use a 40-year interest-only loan to minimize monthly payment
- Use STR income projections via AirDNA if the property is vacation-rental eligible
- Negotiate a seller credit to buy down the rate
📞 Call (800) 239-1103 — we have sub-1.0 DSCR programs and no-ratio options for California investors. Let’s run your numbers. NMLS #323700 | Michael DiVita NMLS #241655.
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
