DSCR vs Conventional Investment 2027

Yes — 0.5-2% above conventional. Lender risk premium. Worth paying if conventional impossible.

Yes once you can document income to conventional standards. Common path: non-QM purchase → refi to conventional in 2-3 years.

Higher minimum: 20-30% typical. Larger down may waive PMI or reduce rate.

Compare DSCR loan vs conventional investment property loan 2027 — DSCR no income docs (just property cash flow), conventional uses personal income.

Loan Type Overview

Specialty loan programs serve borrowers who don't fit conventional underwriting. Higher rates but flexible qualification.

Non-QM market growing as W-2 employment shrinks (gig economy, freelance). Demand for flexible programs rising.

Conventional: 2 yrs W-2, tax returns, DTI < 50%. Specialty: alternative docs (bank statements, assets, P&L), 25%+ down, higher rates.

Negotiate rate down with 25-30% down. Larger down = lender risk reduced = lower rate. Build relationships with non-QM specialists.

Source: fanniemae.com Selling Guide B3-3.5, deephavenmortgage.com DSCR. Last updated: May 2026.

Always higher rate?

Yes — 0.5-2% above conventional. Lender risk premium. Worth paying if conventional impossible.

Can refi later?

Yes once you can document income to conventional standards. Common path: non-QM purchase → refi to conventional in 2-3 years.

Down payment?

Higher minimum: 20-30% typical. Larger down may waive PMI or reduce rate.