INVESTOR LOANS

Financing for real estate investors -

from your first rental to your tenth.

Whether you are buying your first investment property or scaling a portfolio,

the financing strategy matters as much as the deal itself. We offer DSCR loans, conventional

investment mortgages, and portfolio solutions, and we will help you pick the right tool for

each property.

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Investor loan programs

Investment property financing works differently than buying a primary residence.

Here are the programs we use most and when each one makes sense.

DSCR loans (Debt Service Coverage Ratio)

DSCR loans are the go-to for experienced investors. Instead of qualifying based on your personal income (W-2s, tax returns, pay stubs), DSCR loans qualify based on the rental income the property generates. The lender compares the expected rent to the mortgage payment (principal, interest, taxes, insurance, and HOA). If the rent covers the payment, you qualify. No tax returns needed. No employment verification. This is why DSCR loans have become the standard for scaling a rental portfolio.

QUALIFICATION

Property cash flow, not personal income

CREDIT SCORE
660+ minimum, best pricing at 720+

PROPERTY TYPES

1-8 units, SFR, condos, townhomes

DOWN PAYMENT

20% to 25% (15% for strong DSCR)

DSCR REQUIREMENT

1.0 to 1.25 (some programs allow below 1.0)

RATES

Typically 0.5% to 1.5% above conventional

How DSCR is calculated

DSCR = Monthly Rent / Monthly PITIA. Example: $2,200 rent / $1,800 PITIA = 1.22 DSCR. A ratio above 1.0 means the property cash flows positively. Above 1.25 gets you the best rates. Some programs allow DSCR below 1.0 with higher down payment or reserves.

Conventional investment property loans

For investors with strong W-2 income or documented self-employment income, conventional investment property loans through Fannie Mae offer the lowest rates. The tradeoff is full income documentation and limits on how many financed properties you can have (typically up to 10). This is the best option for your first 1 to 4 investment properties if you have the income to qualify.

DOWN PAYMENT

15% (1 unit) to 25% (2-4 units)

INCOME VERIFICATION

Full docs: W-2, tax returns, pay stubs

CREDIT SCORE

620+ minimum, best pricing at 740+

MAX FINANCED PROPERTIES

Up to 10 with Fannie Mae

Conventional investment property loans

Fannie Mae HomeStyle Renovation

HomeStyle is the conventional alternative to FHA 203(k). It allows renovations up to 75% of the after-renovation appraised value with no separate cap on renovation costs. The big advantages over FHA: no upfront mortgage insurance premium, PMI drops off at 20% equity, and it works for primary residences, second homes, and investment properties. The tradeoff is stricter credit requirements and the need for a larger down payment if your credit is below 740.

DOWN PAYMENT

3% to 5% (primary), 10% (second home), 15% (investment)

PROPERTY TYPES

Primary, second home, and investment

MORTGAGE INSURANCE

PMI (removable at 20% equity)

CREDIT SCORE

620+ minimum, best pricing at 740+

MAX RENOVATION

Up to 75% of after-renovation value

WORK TIMELINE

12 months maximum

Best For: Buyers with 700+ credit who want to avoid FHA mortgage insurance, or investors who need renovation financing on a rental property (FHA 203k is primary residence only).

Bank statement loans for investors

If you are self-employed or have complex income that does not show well on tax returns, bank statement programs use 12 to 24 months of bank deposits to calculate qualifying income. This bridges the gap between conventional (which requires tax returns) and DSCR (which requires the property to cash flow). Useful for investors whose personal income is strong but documented unconventionally.

KEY CONSIDERATIONS FOR REAL ESTATE INVESTORS

Property Taxes Impact Your Cash Flow Math

Property tax rates vary significantly by state and county. On a $400,000 rental property, taxes could range from $4,000 to $12,000 or more per year depending on where the property is located. This makes DSCR analysis critical. A property that looks like it cash flows in one area might be break-even or negative in another once taxes are factored in. Always run your numbers with actual tax amounts, not estimates.

Strong Rental Demand Supports DSCR Qualification

In markets with strong rental demand from employment centers, universities, hospitals, and growing populations, vacancy rates tend to stay low and rents stay stable. This translates to reliable DSCR ratios that lenders want to see. Understanding your local rental market dynamics helps you identify properties that will qualify and perform well long-term.

Multi-Family Properties and House Hacking

Many markets have solid inventory of 2-4 unit properties. If you live in one unit and rent the others, you can use FHA financing (3.5% down) on a multi-family up to 4 units. The rental income from the other units helps you qualify for the loan. This is the most accessible entry point for new investors: low down payment, owner-occupant rates, and immediate cash flow from tenants.

LLC and Entity Structuring

Most experienced investors hold rental properties in an LLC for liability protection. DSCR loans can close directly in the LLC name. Conventional loans must close in your personal name but can be transferred to an LLC after closing (check with your lender on due-on-sale clause implications). We help investors understand the financing implications of entity structure before they set up their LLC.

Common Investor Scenarios

"I am buying my first rental property."

If you have W-2 income, conventional financing gets you the best rate with 15% to 25% down. If you want to house-hack a multi-family, FHA at 3.5% down is the most capital-efficient entry. We will compare both paths side by side.

"I have 5+ properties and conventional is maxing out."

This is where DSCR loans shine. No income verification, no limit on property count, and you can close in an LLC. The rate premium over conventional is typically 0.5% to 1%, but the scalability and simplicity are worth it for portfolio growth.

"I want to cash-out refinance a rental to buy another."

Cash-out on investment properties allows up to 75% to 80% LTV depending on the program. If your property has appreciated, you can pull equity to fund the down payment on your next acquisition. DSCR cash-out refinances do not require income docs, just the property cash flow.

"I am a foreign national investing in US real estate."

DSCR loans are available to foreign nationals without US income documentation. Requirements typically include a larger down payment (25% to 30%), a US bank account, and a valid passport. We can walk you through the specific requirements and help you get pre-qualified.

"I want to finance a short-term rental or Airbnb."

Some DSCR lenders accept short-term rental income using AirDNA projections or actual booking history. The key is verifying that local regulations allow short-term rentals in your target area. We help you understand the financing side while you verify the regulatory requirements in your market.

Frequently asked questions

What is a DSCR loan?

A DSCR (Debt Service Coverage Ratio) loan qualifies you based on the rental property cash flow instead of your personal income. No tax returns, W-2s, or employment verification needed. The lender divides expected rent by the total mortgage payment. If the ratio meets their minimum (usually 1.0 to 1.25), you qualify.

How much do I need to put down on an investment property?

Conventional: 15% to 25% depending on units and occupancy. DSCR: typically 20% to 25%. FHA (owner-occupied multi-family): as low as 3.5%. The more you put down, the better your rate and cash flow position.

Can I use rental income to qualify for the loan?

Yes. Conventional loans use 75% of market rent to offset the property payment in your DTI. DSCR loans use 100% of market rent as the primary qualification metric. FHA multi-family loans count 75% of rent from non-owner units.

Can I close in an LLC?

DSCR loans can close directly in an LLC. Conventional loans must close in your personal name. Many investors close conventional in their name and then transfer to an LLC, though you should consult with your attorney on due-on-sale implications.

How many investment properties can I finance?

Conventional: up to 10 financed properties with Fannie Mae. DSCR: no limit on property count. Each deal is evaluated on its own cash flow. This is why DSCR becomes essential once you scale past 4 to 5 properties.