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Program 02
Rental / DSCR in San Jose
San Jose DSCR loans built for a low-yield, high-value rental market.
Hold your rentals with financing that underwrites the asset, not just you. DSCR as low as 0.75, rates from 5.5% interest-only, and 30-year fixed options for single properties or whole portfolios. The San Jose metro is the most expensive housing market in the country, so a San Jose DSCR file is usually a large-down-payment or equity-conversion story rather than a thin-down-payment purchase, and the building's age and location decide what rent you can actually charge. Business-purpose only, and rates and structure are set in underwriting.
0.75
min DSCR
5.5%
rates from
30-yr
fixed avail.
80%
max LTV
Typical figures, subject to underwriting and market conditions. Not a commitment to lend.
How it works
No tax returns or personal income docs in most cases. We qualify on the property's cash flow, so you can scale your portfolio without the paperwork drag of conventional lending.
Who it's for
Buy-and-hold investors
Single rentals and portfolios
Short-term rentals considered
Rate/term and cash-out refi
Typical terms
Loan amount$100K to $3M
Max leverageUp to 80% LTV
DSCRFrom 0.75
CreditFrom 640
Term30-yr fixed / 5-7-10 ARM
RateFrom 5.50% IO*
PrepayFlexible structures
*Typical terms, subject to underwriting and market conditions.
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Local FAQ
Rental / DSCR in San Jose, answered.
What kind of rental yield should I underwrite in San Jose?
Plan on the lowest gross yields in the county, and use them to size your down payment. No city in Santa Clara County produces a gross yield above 3.73% (Gilroy), and San Jose itself runs about 3.04%, against rents that were rising 6% to 9% year over year as of July 2026. That combination, values essentially flat while rents climb, means the math closes slowly, not through a thin-down-payment purchase. A San Jose DSCR file more often works as a large-down-payment buy or a cash-out refinance against equity already built up, and portfolio lenders and appraisers here should expect that yield figure to be gross, before taxes, insurance, vacancy and management, not a net cap rate.
Does San Jose's rent control affect what I can charge on a DSCR rental?
Only if the building is an apartment of three or more units built and occupied before September 7, 1979. San Jose's Apartment Rent Ordinance caps those roughly 38,000 units at one 5% increase in any 12-month period, no CPI adder, and it resets only on a lawful vacancy or eviction. Single-family homes, duplexes, condos, ADUs and any apartment first rented after September 7, 1979 fall outside the ordinance and fall back to state law instead. The vintage of the building, not the city or the county, is what decides the rent trajectory on a San Jose deal, so pull the construction and first-occupancy date before you underwrite rent growth.
What tenant protections apply if I buy an occupied San Jose rental, including an unpermitted unit?
San Jose's Tenant Protection Ordinance gives just cause protection starting on the first day of tenancy, and it covers unpermitted units too. A converted garage or an unapproved back unit that helped a deal pencil is still an “Unpermitted Unit” under the ordinance, and its tenant has just cause protection from day one, with relocation assistance owed to end the unpermitted use. You also cannot renovate your way to a market rent on a rent-stabilized building with the tenant in place: substantial rehabilitation requires costs of at least ten times monthly rent times the units worked on, 30 days of the unit being uninhabitable, and the tenant's right to reoccupy afterward at the old rent. Confirm occupancy status and any unpermitted space before closing, not after.
What annual city fees does San Jose charge a rental property owner?
Two separate per-unit charges, both easy for an out-of-area buyer to miss. The Rent Stabilization Program fee runs $77 a year for a rent-controlled apartment unit and $23 for a non-rent-controlled apartment unit, so even a modern building entirely outside the Apartment Rent Ordinance still pays it. Separately, San Jose taxes landlords as a business under its rental unit business tax: a base of $222.89 a year effective July 1, 2026, plus $12.65 per unit for units 3 through 35, plus a $4 state fee that applies to nearly every business. On a single rental house that is roughly $227 a year in combined city and state fees, small money against a mortgage payment but a real compliance line to underwrite.
Can I run a short-term rental on a San Jose DSCR loan?
Only within limits, and never in an accessory dwelling unit. San Jose requires no short-term rental permit, but caps a listing at 180 days a year with no host present or 365 days with the host on site overnight, and short-term rental is flatly prohibited in an ADU regardless of who is present. A unit inside a rent-stabilized building can only be listed short term if the host occupies it at least 60 consecutive days as a primary residence first. Transient occupancy tax runs 10% total (6% plus 4%), owed by the host. Underwrite a San Jose DSCR file to long-term rent unless the property and its use both clear these rules; do not assume a short-term rental strategy is available on an ADU or a fresh acquisition without checking host-presence status first.
Where in Santa Clara County is rent growth strongest for a DSCR hold?
The employer cities are outrunning the core. As of July 2026, year-over-year rent growth was strongest in Mountain View at 9.5%, followed by Cupertino at 8.7%, Milpitas at 8.4%, Sunnyvale at 7.7% and Santa Clara at 7.3%, while San Jose itself grew a slower 5.9%. Property tax varies with it: San Jose alone runs 204 tax rate areas from about 1.14% to 1.31% of assessed value depending on which school and college bonds stack on the parcel, worth roughly $1,400 a year of carry between the city's median tax rate area and its highest on a purchase at San Jose's mid-tier value. Pull the specific tax rate area and rent comps for the submarket you're underwriting rather than a countywide average.
How much do I need to put down on a San Jose DSCR rental?
At least 20% of the purchase, and in practice often more. Max leverage is up to 80% LTV, so on a $1,400,000 San Jose purchase that is $1,120,000 from us and $280,000 from you (1,400,000 x 80% = 1,120,000). The reason it often runs higher here is yield: San Jose sits near a 3.04% gross yield, which is the kind of number that makes a file clear coverage through a larger down payment or a cash-out against equity already built, not a thin-down-payment purchase. We go as low as 0.75 DSCR. Subject to underwriting.
Does a 640 score go as far in San Jose as a stronger one?
640 is the floor, not the price. Our DSCR program starts at credit from 640, and a file at the floor still gets underwritten without tax returns. What a thin score changes is leverage: weaker credit is usually offset with lower leverage rather than a decline, and at San Jose's sub-4% gross yields the down payment is already doing most of the work. A borrower at 640 here should plan on bringing more than 20% rather than assuming the 80% LTV maximum. Subject to underwriting.
Is there a maximum loan amount on a San Jose DSCR loan?
$3,000,000, with a $100,000 floor. That range covers most San Jose rental purchases, but it does not cover everything in the most expensive housing market in the country. At 80% LTV the program tops out around a $3,750,000 purchase (3,750,000 x 80% = 3,000,000). Above that, or at the ultra-prime end of Santa Clara County, the file moves to a different structure. Send us the address and the rent and we will tell you which one. Subject to underwriting.
Is there a prepayment structure that fits a shorter San Jose hold?
Yes. Prepay on our DSCR program is a flexible structure, not one fixed penalty. Tell us up front how long you actually plan to hold the San Jose rental. A file built for a five-year hold and one built for a thirty-year hold should not carry the same prepay, and we would rather set it at the start than have you buy out of it later. The term itself runs 30-year fixed or a 5, 7 or 10 year ARM. Subject to underwriting.
More Rental / DSCR questions, answered on the program page
Resources
Guides for Rental / DSCR
Rental / DSCR · 5 min read
What Is a DSCR Loan? How Investors Qualify on Rental Income
Read the guide Strategy · 6 min read
Financing the BRRRR Method: Buy, Rehab, Rent, Refinance, Repeat
Read the guide Rental / DSCR · 5 min read
DSCR vs Conventional Loan: Which Is Better for Investment Property?
Read the guide Rates & Costs · 5 min read
Hard Money Loan Rates and Costs, Explained
Read the guide More in San Jose
Other programs in San Jose
Fix and FlipUp to 90% / 100% rehabGround-Up ConstructionUp to 70% LTV, most statesCRE BridgeUp to $10M, 24-36 moTransactional FundingSame-day double-close capitalBank Statement / No-DocNo tax returns requiredConventional InvestmentNon-owner-occupied investmentPortfolio LoansMultiple properties, one loanCRE PermanentLong-term agency & permSBA Financing7(a) & 504 placement
About the local figures on this page
Local rules move. Every tax rate, fee, ordinance and market figure here comes from a primary source and carries the date we read it, and we correct them as the rules change. Where a number is mid-change or we could not verify it, we say so rather than guess. Before you commit a budget, confirm anything that drives it with the city or county, and talk to your attorney or CPA on questions of law or tax.
Published by USA Mortgage Funding, LLC, NMLS #152588. Researched from primary sources by our team, drafted with AI assistance, and every figure checked against its source before publishing. Where an answer rests on a public record, that record is linked under it. Figures read on 2026-08-22.
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