DSCR Loan Calculator California: Free Tool + 2024 Rates
Complete California DSCR Loan Guide
Explore our comprehensive guide covering all California markets, requirements, FAQs, and neighborhood analyses for LA, San Diego, San Francisco, Orange County, and Sacramento.
View Complete CA GuideCalculate your Debt Service Coverage Ratio (DSCR) instantly with our free calculator. Designed specifically for California real estate investors, this tool helps you determine if your investment property qualifies for a DSCR loan based on rental income alone—no personal income verification required.
What is DSCR?
The Debt Service Coverage Ratio (DSCR) measures a property's ability to cover its mortgage payments using rental income. A DSCR of 1.0 means the property breaks even, while 1.25 means it generates 25% more income than needed for the mortgage payment.
California DSCR Loan Calculator
Property Details
Your DSCR Ratio
Good - May Qualify with Higher Rates
Monthly Breakdown
DSCR Examples by California Market (2024)
Los Angeles County Example
Property Details:
- • 2BR/2BA Condo in Pasadena
- • Purchase Price: $650,000
- • 25% Down: $162,500
- • Monthly Rent: $3,500
DSCR Calculation:
- • Monthly PITIA: $3,250
- • DSCR Ratio: 1.08
- • Status: Qualifies with conditions
- • Cash Flow: +$250/month
Orange County Example
Property Details:
- • 3BR/2BA House in Costa Mesa
- • Purchase Price: $850,000
- • 20% Down: $170,000
- • Monthly Rent: $4,800
DSCR Calculation:
- • Monthly PITIA: $4,100
- • DSCR Ratio: 1.17
- • Status: Qualifies
- • Cash Flow: +$700/month
San Diego County Example
Property Details:
- • 2BR/2BA Townhome in La Jolla
- • Purchase Price: $750,000
- • 30% Down: $225,000
- • Monthly Rent: $4,200
DSCR Calculation:
- • Monthly PITIA: $3,350
- • DSCR Ratio: 1.25
- • Status: Excellent - Best Rates
- • Cash Flow: +$850/month
Understanding DSCR Loan Requirements in California
DSCR Ratio Requirements by Lender Type
DSCR 1.25+ (Excellent)
Best rates available, typically 0.25-0.5% lower than standard. Multiple lender options, faster approval process.
DSCR 1.0-1.24 (Standard)
Qualifies with most lenders at standard rates. May require 25% down payment or 6 months reserves.
DSCR 0.75-0.99 (No-Ratio)
Limited lenders available. Requires 30-40% down, higher rates (1-2% above standard), and strong credit (700+).
How to Improve Your DSCR
Increase Rental Income
- •Add value through renovations
- •Convert to short-term rental (if allowed)
- •Add ADU or additional units
- •Optimize rental pricing
Reduce Debt Service
- •Increase down payment (25-30%)
- •Shop for better insurance rates
- •Consider interest-only options
- •Buy in lower tax areas
Current DSCR Loan Rates in California (September 2024)
| DSCR Ratio | Interest Rate Range | Down Payment |
|---|---|---|
| 1.25+ | 6.99% - 7.49% | 20% |
| 1.0 - 1.24 | 7.49% - 7.99% | 25% |
| 0.75 - 0.99 | 8.49% - 9.49% | 30-40% |
*Rates shown are for 30-year fixed loans with 720+ credit score. Actual rates vary by lender and market conditions.
Frequently Asked Questions
What is the minimum DSCR ratio for California investment properties?
Most California lenders require a minimum DSCR of 1.0, though some offer "no-ratio" loans starting at 0.75 DSCR with higher down payments (30-40%). For the best rates and terms, aim for a DSCR of 1.25 or higher.
How is DSCR calculated for short-term rentals (Airbnb/VRBO)?
For short-term rentals, lenders typically use 12 months of rental history or a market analysis showing comparable STR income. Some lenders apply a 10-20% discount to STR income due to higher vacancy rates and operating expenses.
Can I use projected rents for a DSCR loan calculation?
Yes, for purchase transactions, lenders use market rent estimates from the appraisal. For refinances with existing tenants, actual lease agreements are required. The appraiser will provide a rent schedule comparing your property to similar rentals.
What expenses are included in the DSCR calculation?
DSCR calculations include Principal, Interest, Taxes, Insurance, and HOA fees (PITIA). Property management fees, maintenance, and utilities are NOT included in the DSCR calculation, though you should factor these into your investment analysis.
Do California DSCR loans require reserves?
Most lenders require 3-6 months of PITIA payments in reserves. For DSCR ratios below 1.2, expect 6-12 months reserve requirements. Reserves can include checking, savings, retirement accounts (at 70% value), and other liquid assets.
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