Choosing between a DSCR loan and a conventional loan for a California rental property comes down to one question: how do you want to qualify? Conventional loans look at your income. DSCR loans look at the property’s income. Both can work — but for active investors, DSCR removes the barriers that stop most people from scaling.
Side-by-Side Comparison
| Feature | DSCR Loan | Conventional Loan |
|---|---|---|
| Income verification | None — property income only | Full docs (W-2, tax returns, pay stubs) |
| DTI ratio | Not calculated | Required (max 43–50%) |
| Number of properties | Unlimited (no Fannie cap) | Capped at 10 financed properties (Fannie) |
| Rate vs. conventional | 1.0%–2.0% higher | Lower — best available market rate |
| Min down payment | 20–25% | 15–20% (investment) |
| Min credit score | 680 | 620 (investment, varies) |
| Self-employed friendly | Yes — income ignored | Complex — 2-yr avg after deductions |
| Closing speed | 15–21 days typical | 21–30 days typical |
| LLC vesting | Yes (most programs) | Usually no |
When Conventional Wins
- You have strong W-2 income and low DTI
- You have fewer than 4–6 mortgages
- The property’s DSCR would be below 1.0 (conventional still looks at your income, not the property’s)
- Minimizing rate is the top priority
When DSCR Wins
- You’re self-employed with heavy write-offs — your taxable income won’t support the loan
- You already have 4+ mortgaged properties
- You want to close in an LLC or trust
- You’re a first-time investor who can’t show landlord history
- You want to scale a portfolio without DTI limiting you
Most serious California investors end up using both — conventional for the first few properties, DSCR when conventional caps out or their income picture gets complex.
📞 Call (800) 239-1103 — we’ll tell you which loan type fits your situation and current portfolio. 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
