DSCR vs. Conventional: Which Should Investors Actually Use?
A side-by-side of qualifying, pricing, and vesting — plus the two scenarios where DSCR is almost always the wrong call.
Conventional investor loans (Fannie/Freddie) still price better on rate — usually 0.5%–1.0% below DSCR — and they count toward the 10-financed-property cap. DSCR loans qualify on the property's cash flow, allow LLC vesting, and don't touch your personal DTI.
Use conventional when: you have W-2 income, few write-offs, and you're under 4 financed properties. Use DSCR when: you're self-employed with heavy write-offs, you need LLC vesting for liability reasons, or you're stacking beyond conventional's limits.
Where DSCR is almost always wrong: primary residences (not allowed) and short-term flips under 6 months (bridge or hard money is cheaper).
This article is for informational purposes and is not an offer to lend or a commitment to make a loan. All loans subject to underwriting approval, program guidelines, and appraisal. Equal Housing Opportunity.