DSCR loans have far fewer requirements than conventional investment loans — but the requirements that exist are strictly enforced. This guide covers everything California investors need to know before applying in 2026.
Monthly rent ÷ monthly PITIA. Must be at least 0.75 with most lenders. Ratios of 1.0+ unlock the most lender options and best rates. Ratios of 1.25+ get the best pricing available.
Most California DSCR lenders start at 640–680 minimum. Best rates at 740+. Unlike conventional loans, there's no DTI calculation — credit score is the primary borrower-level qualification factor.
Minimum is typically 20% (80% LTV). Putting 25% down unlocks better rates and lower DSCR requirements with most lenders. Some California jumbo DSCR loans require 25–30% down.
After closing, lenders require 6–12 months of the property's total monthly payment in liquid assets. Can be bank accounts, retirement accounts (at 70% of value), or other liquid assets.
Single-family homes get the widest lender selection and best rates. 2-4 unit properties, warrantable condos, and short-term rentals are also eligible. Non-warrantable condos and rural properties have fewer options.
DSCR loans are for non-owner-occupied investment properties only. You cannot use a DSCR loan for your primary residence, second home, or any property you intend to occupy.
This is where DSCR loans shine — the document list is dramatically shorter than conventional loans:
Self-employed investors: Your tax returns showing low income after deductions are completely irrelevant to DSCR qualification. The lender never sees them. Qualification is based entirely on the property's rental income and your credit score.
| Loan Amount | Min Credit | Min Down | Min DSCR | Reserves |
|---|---|---|---|---|
| Under $500K | 620 | 20% | 0.75 | 6 months |
| $500K–$1M | 640 | 20–25% | 1.0 | 6–9 months |
| $1M–$2M (Jumbo) | 680 | 25% | 1.0–1.10 | 9–12 months |
| $2M–$3M (Super Jumbo) | 720 | 25–30% | 1.10–1.25 | 12+ months |
Note: These are general ranges. Individual lenders vary significantly. A wholesale broker can match your specific scenario to the lender with the most flexible guidelines for your loan size.
Short-term rental DSCR loans have slightly different requirements because income is not from a long-term lease:
Most California investors want to hold investment properties in an LLC for liability protection. DSCR lenders accommodate this — unlike conventional lenders who require personal vesting. Here's what you need:
Important: The personal guarantee means your personal credit still matters for DSCR loans in an LLC. Your personal income still does not. The lender will pull your personal credit and use your score to price the loan — but they won't verify your personal income.
If rent doesn't cover at least 75% of the payment, most lenders won't proceed. Solutions: increase down payment, buy down the rate, find a higher-rent property, or use STR income projections if the market supports it.
Below 620 and most DSCR lenders won't touch the file. Between 620–640, options are limited. Take 60–90 days to improve your score before applying if you're in this range.
DSCR lenders won't approve properties in poor condition. The appraisal must confirm the property is habitable and in marketable condition. Significant deferred maintenance, structural issues, or unpermitted additions can kill a DSCR deal.
Many California cities have banned or heavily restricted short-term rentals. If you're using Airbnb income for your DSCR calculation, the property must be legally permitted for STR in that jurisdiction. LA, San Francisco, and Santa Monica have strict STR regulations.
Not having 6–12 months of PITIA in liquid assets after closing is a common stumbling block. Retirement accounts typically count at 70% of their value. Gift funds generally cannot be used for reserves.
Tell us about your property and we'll calculate your DSCR ratio, identify any qualification gaps, and match you with the right lender. No income docs required. No credit pull to get started.
Check My EligibilityYes. All DSCR loans require an appraisal to confirm property value and condition. The appraisal also includes a rent schedule (Form 1007) showing market rent for the property, which lenders use to verify the rental income used in the DSCR calculation.
No. DSCR qualification is property-specific — only the income from the subject property (the one being financed) is used in the calculation. Income from your other properties doesn't factor into the DSCR ratio for a new purchase.
Typically 14–21 days through wholesale lenders. The main variables are appraisal turnaround time and how quickly you provide required documents. Having all documents ready on day one is the biggest factor in fast closing.
Yes. DSCR loans are available for rate/term refinance and cash-out refinance on existing investment properties. The same DSCR ratio requirements apply — the property's current rent must meet the minimum ratio at the new payment level.
Making Mortgage Easy is a licensed California wholesale mortgage broker. NMLS# 1082653 · DRE# 02244476 · Shield Home Loans Inc. NMLS# 2396589. Requirements shown are general guidelines as of May 2026. Individual lender requirements vary and are subject to change. This content is for informational purposes only and does not constitute financial or investment advice.