Question 1

Does San Diego's military presence support DSCR rent assumptions?

Accepted Answer

In the right submarkets, yes, and it is a genuine income floor rather than a guess. 2026 Basic Allowance for Housing in the San Diego military housing area for pay grade E-1 to E-4 with dependents is $3,666 a month, and E-5 is $3,975, against a metro-wide observed rent of $2,991 as of June 2026, so the lowest enlisted bracket alone clears median rent by roughly $675 a month and E-5 by roughly $984. That floor is strongest around the Camp Pendleton corridor (Oceanside, Vista) and the south and central bay near Naval Base San Diego (Chula Vista, National City); it does not apply the same way inland in Escondido or El Cajon. One underwriting note that cuts the other way: under the Servicemembers Civil Relief Act, a tenant with PCS or deployment orders of 90 days or more can end the lease on notice with no early-termination charge, so model turnover and make-ready cost, not just steady occupancy.

Question 2

Can I underwrite short-term rental income into a San Diego DSCR pro forma?

Accepted Answer

Only if the property already holds a whole-home licence, and you cannot count on buying one with the house. The City of San Diego's Tier 3 whole-home Short-Term Residential Occupancy licence is capped at 1% of citywide housing units outside Mission Beach, with 4,836 issued and 829 remaining as of 2026-08-14; Tier 4 inside Mission Beach is fully issued, waitlist only, filled by random lottery once the tier closes. STRO licences are not transferable between owners, hosts, or dwelling units, so a seller's licence does not convey at closing, and one host may hold only one licence. A Tier 3 or Tier 4 licence also requires 90 days of actual STRO use a year to keep it. A DSCR file built on nightly-rate income needs the licence already secured, not assumed. If the property needs work before it can rent at all, our fix and flip loan can fund the acquisition and rehab first, with a DSCR refinance behind it qualifying on the finished property's actual rent.

Question 3

Should I underwrite a San Diego DSCR loan off the seller's property tax bill?

Accepted Answer

No. Under Proposition 13, your purchase resets the assessed value to what you pay, so a long-held seller's tax line has nothing to do with yours. On a $1,000,000 purchase in a City of San Diego tax rate area at the common 1.25114% rate, the tax runs about $12,511 a year; the same house held since the 1990s on a $250,000 assessed base runs about $3,128, roughly a quarter of your bill on an identical property. San Diego County tax rate areas run from 1.01903% to 1.28664%, so a 25-basis-point spread inside the city alone is real money on a DSCR pro forma. Pull the parcel's tax rate area rate and apply it to your purchase price, not the listing's stated annual taxes.

Question 4

Does San Diego cap how much I can raise rent on a DSCR rental?

Accepted Answer

Yes, two layers, and the local one has a trap for entity-titled property. Statewide AB 1482 caps increases at 5% plus regional CPI or 10%, whichever is less; for San Diego County the cap running from 2026-08-01 through 2027-07-31 is 8.2%. On top of that, the City of San Diego's Residential Tenant Protections Ordinance requires just cause for eviction from day one of the tenancy, with no 12-month qualifying period, and pays relocation assistance of two months' rent for a no-fault move-out, rising to three months for tenants 62 or older or disabled. A single-family home or condo is outside that City ordinance only if the landlord is not a corporation, LLC, or REIT. Most DSCR borrowers hold title in an entity, which means the exemption will not apply and the just-cause and relocation rules govern the tenancy.

Question 5

Are there costs beyond property tax that affect DSCR cash flow in Chula Vista or the south bay?

Accepted Answer

Yes. Community Facilities District special taxes, known locally as Mello-Roos, are fixed charges rather than a percentage of value. So they sit outside Proposition 13's 1% ad valorem ceiling and will not show up if you only pull the tax rate area rate. They cluster in eastern Chula Vista and the newer north county master-planned areas, and they stack: a single Otay Ranch parcel can carry a city improvement district, a city maintenance district, a school district CFD, and an open space assessment on the same bill, on top of the sewer charge. District-wide averages run roughly $750 to $3,300 a parcel a year depending on the district, but those are district-wide means across different lot sizes, not a per-address figure, so pull the parcel's actual fixed charges off its tax bill before you underwrite it.

Question 6

Which San Diego County city gives the best rent-to-value number for a DSCR deal?

Accepted Answer

National City and Chula Vista post the highest gross yields in the county on the lowest entry basis, while the city of San Diego itself carries the highest entry basis and one of the lowest yields of the set. As of June 2026, Zillow's mid-tier home value against its observed rent index works out to about 4.28% gross yield in National City ($692,258 value, $2,472 rent) and 4.25% in Chula Vista ($849,516 value, $3,008 rent), against about 3.64% in the city of San Diego ($1,002,065 value, $3,038 rent); that math is ours, on published index levels, and it is not a cap rate, so it nets out none of your taxes, insurance, or vacancy. Note the trade-off: the city of San Diego is the only submarket in the set with the STRO licence cap and the tenant protections ordinance, while unincorporated Spring Valley has no city short-term rental ordinance and no city tenant ordinance, since county rules govern there instead.

Question 7

How much do I put down on a San Diego DSCR rental?

Accepted Answer

Plan on 20% of the purchase, plus closing costs and reserves. Maximum leverage on this program is up to 80% LTV. On a $1,000,000 purchase in the city of San Diego that is $800,000 from us and $200,000 from you (1,000,000 x 80% = 800,000). On a $692,258 National City basis the same 80% works out to about $553,806 financed and $138,452 down. Entry basis is the reason the south bay cities pencil differently from the coastal core here, so run the number on the parcel you are actually buying. Subject to underwriting.

Question 8

Is there a minimum or maximum loan size for a San Diego DSCR loan?

Accepted Answer

We lend from $100,000 to $3,000,000 on this program. The floor rarely matters in this county. The ceiling does: mid-tier value in the city of San Diego runs about $1,002,065, so a single door sits well inside the cap, but a larger coastal property or a multi-unit purchase can approach the $3,000,000 maximum once you size at up to 80% LTV. If your book is bigger than one loan can hold, a portfolio loan is the structure that fits. Subject to underwriting.

Question 9

My San Diego rental does not cover its payment. Can I still get a DSCR loan?

Accepted Answer

Possibly. We write DSCR from 0.75, which means the property can come in below break-even and still qualify. That matters in a high-basis county where a $1,000,000 entry against a metro observed rent of $2,991 rarely clears 1.0 on day one. Two local lines move the ratio more than people expect: your tax bill resets to your purchase price under Proposition 13 rather than the seller's, and in the Pendleton corridor and the south and central bay the military housing allowance puts a real floor under collectible rent. Credit starts at 640 on this program. Subject to underwriting.

Rental / DSCR in San Diego

How it works

Run your Rental / DSCR numbers.

Rental / DSCR in San Diego, answered.

More Rental / DSCR questions, answered on the program page

Guides for Rental / DSCR

Rental / DSCR vs. other options

Other programs in San Diego

Funding San Diego deals fast.