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Program 02
Rental / DSCR in San Luis Obispo
DSCR rental loans for San Luis Obispo County buy-and-hold investors.
USA Mortgage funds DSCR rental loans for buy-and-hold investors across San Luis Obispo County, qualifying on the property's cash flow instead of your tax returns. We lend from a 0.75 DSCR, rates from 5.50% interest-only, and offer 30-year fixed terms up to 80% LTV. From the yield running north through Paso Robles to the flat-population coast, we underwrite the county the way it actually behaves, city by city. Financing is business-purpose only and subject to 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 Luis Obispo, answered.
Where in San Luis Obispo County does a DSCR loan pencil best?
North County, on the numbers as of July 2026. Gross yield on Zillow's July 2026 home value and rent pairs runs 4.29% in Paso Robles versus 3.22% in the city of San Luis Obispo, with Morro Bay, Pismo Beach and Atascadero in between. The county seat carries the highest rent per unit in the county and the worst yield, because its basis is over $1.09 million against North County's roughly $780,000. Run the DSCR math on the actual city, not a county average.
Can I run a short-term rental to hit DSCR in the city of San Luis Obispo?
Not as a whole-home rental. Only a homestay works, and it has to be owner-occupied. The city's municipal code makes non-owner-occupied short-term rental a prohibited use; only homestay rentals are allowed, and the operator must annually verify primary residence and keep overnight guests to four adults. A DSCR file built on nightly-rate income for a non-owner-occupied city property does not match what the city actually permits.
What about short-term rental licensing outside the city of San Luis Obispo?
Legal and licensed in the unincorporated county, but capped and city-specific everywhere else. Unincorporated San Luis Obispo County licenses over 2,200 vacation rentals through a zoning clearance and business license. Los Osos caps at 55 inside its Urban Reserve Line, Morro Bay caps full-home permits at 175 with a waitlist, and Paso Robles is already at its 325 citywide cap (75 in the R-1 sub-cap). Pismo Beach stopped issuing new licenses in November 2023 and permits do not transfer with a sale, so buying an existing STR there does not carry the license with it. Underwrite the specific city's program, not a county-wide assumption.
Does the city of San Luis Obispo require rental registration or inspection for a DSCR hold?
No. The city adopted a Rental Housing Inspection Program in 2015 and repealed it in 2017 after litigation and a council election fought over it. What replaced it is the complaint-driven Safe Housing Program run out of Code Enforcement, not a standing registration or inspection cycle. That is a lighter ongoing compliance load than cities that run an annual rental license renewal.
How does Cal Poly's housing change affect a DSCR pro forma near campus?
Stress-test it before you underwrite last year's lease-up. Cal Poly now requires every first-year student arriving in 2026 to live on campus for their first two academic years, 2026-27 and 2027-28, a rule that previously applied only to select colleges. That removes an entire class year of sophomore renters from the off-campus city market starting with the 2027-28 school year. A near-campus rental's rent roll should be underwritten against that shift, not against current occupancy.
Does the property tax rate change how I should structure a multi-city DSCR portfolio here?
Yes, build the tax line city by city. The county's 2024-25 total property tax rate ranges from 1.04915% in Arroyo Grande to 1.14515% in Grover Beach, a full tenth of a point of assessed value a year between the low and high end. A DSCR portfolio spanning multiple SLO County cities should carry a per-city tax line in the pro forma rather than a single county-wide estimate.
FAQ
Rental / DSCR questions, answered.
What is a DSCR loan, and how do I qualify without tax returns?
A DSCR (debt service coverage ratio) loan qualifies on the property's rental income instead of your personal income, so there are no W-2s or tax returns required. We compare the rent, from a signed lease or the appraiser's market-rent estimate, against the monthly payment. A DSCR of 1.00 means the rent covers the payment, and we lend with a DSCR as low as 0.75.
What rate and terms can I get on a rental loan?
Our rental program starts around 5.50% interest-only, with 30-year fixed and 5/7/10-year ARM options, for a single property or a whole portfolio. The lowest pricing goes to strong credit, lower leverage, and a DSCR above 1.20; your quote depends on the file and is subject to underwriting.
How much can I borrow, and what is the maximum LTV?
We finance up to 80% loan-to-value on a purchase, with rate-and-term and cash-out refinances available, on loan amounts from $100K to $3M. Cash-out leverage is typically a little lower than purchase. The property's cash flow and your credit set your final leverage.
What credit score do I need for a DSCR loan?
We start at 640, and the best pricing goes to strong credit. Because the loan qualifies on the asset, your score affects your rate and leverage more than whether you are approved.
Can I get a DSCR loan on a short-term rental (Airbnb)?
Yes, short-term rentals are considered. We can underwrite using market or projected rents, and the property still needs to meet our DSCR. Tell us how the property is operated so we can structure it correctly.
Is there a prepayment penalty?
Long-term rental loans usually carry a prepayment penalty, commonly a step-down such as 5/4/3/2/1. We offer flexible prepay structures, including buying down to a shorter penalty for a slightly higher rate, and we will lay out the options on your term sheet.
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 Luis Obispo
Other programs in San Luis Obispo
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
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