DSCR loan rates run higher than conventional mortgage rates — and that’s by design. The premium buys you no income verification; the property qualifies the loan, not your tax returns. For investors who can’t or don’t want to document personal income through W-2s and tax returns, DSCR is often the only workable path to California investment property financing. I’m Michael DiVita — DRE #01818285 | NMLS #323700, DiVita Home Finance, Tiburon, CA. Call me at (800) 239-1103 for a same-day DSCR rate quote.
2026 DSCR Rate Ranges — California
| Loan Type | Rate Range (2026) | Notes |
|---|---|---|
| 30-yr DSCR (DSCR 1.25+) | 7.125%–7.875% | Best pricing tier |
| 30-yr DSCR (DSCR 1.0–1.24) | 7.375%–8.125% | Standard tier |
| 30-yr DSCR (DSCR below 1.0) | 8.25%–9.50% | Sub-1.0 programs |
| 40-yr DSCR IO | 7.875%–8.75% | Lower payment, higher rate |
| STR DSCR (Airbnb income) | 7.50%–8.50% | AirDNA income used |
| Multifamily 5–10 units | 7.75%–9.00% | Specialty pricing |
What Moves Your DSCR Loan Rate
- DSCR ratio — 1.25+ gets the best tier; below 1.0 triggers sub-1.0 pricing
- Credit score — 740+ earns best pricing; 680 is often the minimum
- Down payment — 25%+ preferred; 20% minimum on most programs
- Property type — SFR cheapest; 2–4 units moderate; 5–10 units and STR add a spread
- Loan size — Jumbo DSCR (above $832,750 baseline or $1,209,750 high-cost) adds 0.25%–0.50% in most cases
- Loan term — 30-year fully amortizing is baseline; 40-yr IO adds a premium
DSCR vs. Conventional Rates — Is the Premium Worth It?
On a $600,000 DSCR loan at 7.75% vs. a conventional at 6.875%, the monthly difference is roughly $270/month. If the property’s rent supports the DSCR loan and wouldn’t qualify you on a conventional — common for investors with multiple mortgages or complex income — the DSCR loan isn’t just an option, it’s the only path. The rate premium is the cost of the qualification flexibility.
How to Get the Lowest DSCR Rate
- Keep your DSCR above 1.25 — it unlocks the best pricing tier
- Score 740+ — each tier band (680/700/720/740) affects rate
- Put 25%–30% down — lower LTV = lower rate
- Buy down the rate with points if the seller will contribute
- Work with a broker who shops multiple DSCR investors — not a single bank
Frequently Asked Questions
Why are DSCR loan rates higher than conventional mortgage rates?
DSCR loans carry a rate premium because lenders take on more risk by qualifying the property rather than the borrower’s income. With no W-2 or tax return verification, lenders can’t rely on documented income stability. They compensate by charging 1.0%–2.0% above comparable conventional rates. The premium also reflects the fact that DSCR loans are held in portfolio or sold to private investors rather than being sold to Fannie Mae or Freddie Mac, which creates a different funding cost structure.
What DSCR ratio gives me the best interest rate?
A DSCR of 1.25 or higher typically unlocks the best pricing tier with most lenders — typically 0.25%–0.50% lower than loans with DSCRs between 1.0 and 1.24. Properties with DSCRs below 1.0 (where rent doesn’t cover the full mortgage payment) require sub-1.0 or no-ratio DSCR programs with rates that can run 8.25%–9.50%. Improving your DSCR by increasing your down payment or targeting properties with stronger rental income to price ratios is the most direct path to better pricing.
Can I get a DSCR loan for a California property under $500,000?
Yes. DSCR loans are available in most California markets regardless of price. In lower-cost CA markets like the Central Valley, Inland Empire, and Sacramento, properties in the $300,000–$500,000 range often produce stronger DSCRs than coastal markets because rent-to-price ratios are more favorable. Minimum loan amounts for DSCR programs typically start around $100,000–$150,000. DiVita Home Finance works with DSCR investors who lend throughout California including smaller loan sizes.
Talk to Michael Directly
DiVita Home Finance | Tiburon, CA | Licensed since 2007. DRE #01818285 | NMLS #323700.
💬 Text: (310) 849-9124
