DSCR Loans in California: What Investors Should Know
A DSCR loan qualifies a rental on its rent rather than your personal income, and each lender sets its own terms. Lenders closed 53,933 loans on one- to four-unit investment properties in California in 2025, the most of any state, according to HMDA data. About 72% were flagged by the lender as primarily for a business purpose.
Last updated October 21, 2026California investor lending in 2025
California's investor loans had a median near $485,000. About 51% were purchases and 44% refinances, including 26% that were cash-out refinances. Investor loans made up about 9% of all the loans reported under HMDA in the state. These counts cover all investor lending, not DSCR loans alone. See investment property loans by state for every state.
Where investors borrowed
The 14 California counties with the most investor loans in 2025. Los Angeles County led with 12,215, ahead of San Diego County with 4,732. Medians ran from near $235,000 in Kern County to near $825,000 in Santa Clara County, and purchases made up anywhere from 44% of investor loans in Los Angeles County to 62% in Placer County.
| County | Investor loans closed | Median loan, about | Business-purpose | Purchase |
|---|---|---|---|---|
| Los Angeles County | 12,215 | $635,000 | 74% | 44% |
| San Diego County | 4,732 | $605,000 | 72% | 47% |
| Orange County | 4,534 | $735,000 | 69% | 51% |
| Riverside County | 3,807 | $395,000 | 69% | 56% |
| San Bernardino County | 3,244 | $355,000 | 73% | 57% |
| Sacramento County | 2,670 | $355,000 | 62% | 59% |
| Santa Clara County | 2,141 | $825,000 | 68% | 47% |
| Alameda County | 1,655 | $615,000 | 73% | 49% |
| Kern County | 1,565 | $235,000 | 74% | 56% |
| Fresno County | 1,497 | $265,000 | 69% | 57% |
| San Joaquin County | 1,443 | $405,000 | 61% | 60% |
| Contra Costa County | 1,256 | $475,000 | 73% | 52% |
| Ventura County | 921 | $525,000 | 70% | 50% |
| Placer County | 888 | $415,000 | 62% | 62% |
1,724 California investor loans had no county in the public file and aren't shown.
How a DSCR loan works
The lender divides the property's rent by its full payment of principal, interest, taxes, insurance and any association dues. The DSCR programs we read publish limits that mean 15% to 25% down and credit minimums from 620 to 700. See DSCR loan questions, answered and what affects DSCR loan rates.
Property taxes reset when you buy
California's Board of Equalization says that once a county assessor determines a change in ownership has occurred, Proposition 13 requires the assessor to reassess the property to its current fair market value as of the date ownership changed. Property taxes are part of the payment a DSCR loan measures the rent against, so when you estimate the ratio on a California purchase, use the tax on your price, not the seller's current bill. See how the ratio is calculated.
What to ask a lender
- What ratio, down payment and credit score do you require on a California rental?
- Will you use the appraisal's market rent or my lease?
- Is there a prepayment penalty, and for how long?
- What rate, points and fees will you put in writing?
How to read these numbers
They're loans that closed in 2025, from every lender reporting under HMDA, not today's offers and not FreeRateUpdate's activity. They count only loans the lender reported as closed-end and not a reverse mortgage; loans reported as exempt from either field are left out. Loan amounts in the public file are rounded to the midpoint of a $10,000 range, so medians are approximate. Business-purpose is the lender's own HMDA flag, not a DSCR label.
| Investor loans closed | 53,933 (the most of any state) |
|---|---|
| Median loan | About $485,000 |
| Business-purpose share | About 72% |
| Purchase vs. refinance | 51% purchase, 44% refinance |
| Most investor loans | Los Angeles, San Diego, Orange |
Related questions
Sources
- https://ffiec.cfpb.gov/data-browser/
- https://ffiec.cfpb.gov/documentation/publications/loan-level-datasets/lar-data-fields
- https://ffiec.cfpb.gov/documentation/publications/modified-lar/resources/data-dictionaries/mlar-dd-2018-onward
- https://www.boe.ca.gov/proptaxes/faqs/changeinownership.htm
- https://www.kiavi.com/loans/dscr
- https://www.griffinfunding.com/non-qm-mortgages/dscr-loans/
- https://angeloakms.com/programs/investor-cash-flow-mortgage-program/
Sourced from licensed loan officers and brokers in the FreeRateUpdate network.
Educational information only, not individualized financial or legal advice. Program details and rates change; verify current terms with a licensed loan officer before making a decision.