DSCR and conventional investor financing serve overlapping but distinct use cases. Choosing correctly depends on your income documentation, leverage requirements, and portfolio size.
When DSCR is better
Self-employed with hard-to-document income. LLC vesting strongly desired. Past Fannie 10-property cap. Need fast underwriting without tax returns. Investor-only acquisition (not house-hack).
When conventional is better
W-2 income with clean DTI. First-time investor. Want lowest possible rate. House-hack with owner-occupancy. Lower leverage acceptable.
Rate differential
DSCR typically 1-2% above conventional investor rates. Trade-off: DSCR doesn't require income docs and has no portfolio limit.
DSCR vs Conventional Investor Financing FAQ
Yes. Many investors use conventional for first 4-7 properties (best pricing), then switch to DSCR after hitting DTI or portfolio limits.
DSCR loans with LLC vesting typically don't appear on personal credit. Personal guarantees from LLC members may have indirect effects.
DSCR — typically 21-35 days. Conventional investor with full doc package can take 30-45 days, sometimes longer with complex income.