The Core Difference
Conventional refinances qualify on your personal income. DSCR refinances qualify on the property's rental income. That one difference cascades into every other comparison on this list: from documentation requirements to closing timeline to who can even use the product.
Side-by-Side Comparison
| Feature | Conventional | DSCR |
|---|---|---|
| Income docs | W-2, tax returns, pay stubs | None required |
| DTI calculation | Yes (~45% max) | No |
| Seasoning for cash-out | 12 months (Fannie) | None |
| LLC ownership | Not permitted | Standard |
| Property count limit | 10 financed | No limit (program dep.) |
| Cash-out max LTV | 75% | 80% |
| Max loan amount | Conforming limit | $5,000,000 |
| Rate vs each other | Lower | 0.5–1.5% higher |
| Close time | 30–45+ days | 28 days avg |
| Sub-1.0 DSCR eligible | No | Yes (expanded) |
When Conventional Still Makes Sense
For investors with strong W-2 income, 1–2 properties, and a 12-month timeline flexibility, conventional refinancing produces lower rates. If the rate differential outweighs the flexibility advantages, and your personal income qualifies comfortably, conventional may be the right call. The break-even point depends on your loan size and hold duration.
When DSCR Is the Clear Choice
- Self-employed with write-offs that reduce taxable income
- More than 10 financed properties (conventional limit)
- Need to close before a 12-month seasoning period expires
- Want to close in an LLC (conventional prohibits this)
- No executed lease in place
- Sub-1.0 DSCR property
- Loan amount above conforming limits
The Rate Premium
DSCR rates run approximately 0.5–1.5% higher than equivalent conventional rates for the same credit profile and LTV. For many investors, this premium is worth paying in exchange for faster cycle time, no income documentation, LLC closing, no portfolio limits, and access to loan sizes above conforming limits. The rate premium is the cost of flexibility, and for active investors, flexibility compounds.
The Bottom Line
Conventional refinancing is a better product if you qualify and have timeline flexibility. DSCR refinancing is the right product for every situation where conventional doesn't work: which describes the majority of active real estate investors. The question isn't which product is better in the abstract. It's which product gets your specific deal done.