Investment Property Loan Options – Finance Your Real Estate Investment

Investment Property Loan Options | DSCR, Non-QM, and Conventional Mortgages

Introduction to Investment Property Loans

Financing an investment property requires specialized loan products that account for rental income potential, property value, and borrower qualifications. Whether you’re purchasing your first rental property or expanding your real estate portfolio, The Mortgage Calculator offers a wide variety of conventional, DSCR, Non-QM, and fix-and-flip loan options tailored for real estate investors.

This guide explores the different types of investment property mortgage options, eligibility criteria, down payment requirements, and links to relevant resources on The Mortgage Calculator website to help you find the best financing solution for your investment goals.

1. Conventional Loans for Investment Properties

What Is a Conventional Loan for Investment Properties?

A conventional loan is a mortgage that follows the guidelines set by Fannie Mae and Freddie Mac. These loans can be used to finance single-family homes, condos, and 2-4 unit properties that will be used as rental or income-generating properties.

Eligibility Requirements:

  • Minimum credit score of 680-700+

  • Down payment of at least 15-25% depending on property type

  • DTI ratio under 45%

Loan Limits:

  • Loan limits for conventional loans are set by the FHFA. For 2024, the baseline conforming loan limit is $726,200 for most areas, with higher limits in high-cost regions.

? Learn More About Conventional Loans

2. DSCR Loans – Debt-Service Coverage Ratio Loans

What Is a DSCR Loan?

A DSCR (Debt-Service Coverage Ratio) loan allows real estate investors to qualify for a mortgage based on the property’s rental income potential rather than the borrower’s personal income. This loan is perfect for investors who want to grow their portfolio without the burden of traditional income verification requirements.

Eligibility Requirements:

  • Minimum credit score of 620-680, depending on the loan amount

  • DSCR ratio of at least 1.00 or higher (rental income should cover monthly mortgage payments)

  • Down payment of 20-25%

Loan Limits:

  • Loan amounts available up to $5 million

  • Available for single-family, 2-4 unit properties, condos, and mixed-use properties

? Learn More About DSCR Loans

3. Non-QM Loans for Investment Properties

What Is a Non-QM Loan?

A Non-QM (Non-Qualified Mortgage) loan is a flexible loan product that allows borrowers to qualify based on alternative income verification methods such as bank statements, 1099 income, or a Profit & Loss (P&L) statement. Non-QM loans are ideal for self-employed investors, real estate entrepreneurs, and those with complex financial situations.

Popular Non-QM Loan Types for Investment Properties:

Eligibility Requirements:

  • Minimum credit score of 600-680

  • Higher down payment of 20-30% depending on the loan type

  • Flexible documentation requirements

Loan Limits:

  • Loan amounts available up to $5 million

? Learn More About Non-QM Loan Options

4. Fix-and-Flip Loans for Short-Term Investors

What Is a Fix-and-Flip Loan?

A fix-and-flip loan is a short-term financing option designed for real estate investors who purchase distressed properties, renovate them, and sell them for a profit. These loans typically have shorter terms and higher interest rates but allow investors to quickly finance property acquisition and renovations.

Eligibility Requirements:

  • Minimum credit score of 620-650

  • Down payment of at least 20%

  • Experience in real estate investing preferred

Loan Limits:

  • Loan amounts available up to 85% of the purchase price and 100% of renovation costs

? Learn More About Fix-and-Flip Loans

5. Hard Money Loans for Investment Properties

What Is a Hard Money Loan?

A hard money loan is an asset-based loan that uses the property as collateral rather than relying on the borrower’s creditworthiness. Hard money loans are typically used by real estate investors who need quick access to funds for property acquisitions, renovations, or refinancing.

Eligibility Requirements:

  • Minimal credit requirements

  • Higher down payments (typically 25-35%)

  • Short-term financing with interest-only payments

Loan Limits:

  • Loan amounts available up to 75% of the property’s after-repair value (ARV)

? Learn More About Hard Money Loans

6. Jumbo Loans for High-Value Investment Properties

What Is a Jumbo Loan?

A jumbo loan is a mortgage that exceeds the conforming loan limits established by Fannie Mae and Freddie Mac. Jumbo loans are commonly used to finance luxury investment properties or multi-unit rental properties that exceed conventional loan limits.

Eligibility Requirements:

  • Minimum credit score of 700+

  • Down payment of at least 20-30%

  • DTI ratio under 45%

Loan Limits:

  • Loan amounts typically exceed $726,200 in most areas and $1,089,300 in high-cost areas

? Learn More About Jumbo Mortgage Loans

7. Cash-Out Refinance for Investment Properties

What Is a Cash-Out Refinance?

A cash-out refinance allows real estate investors to access equity in their existing investment properties by refinancing the loan amount and pulling out cash to reinvest in additional properties or cover other expenses.

Eligibility Requirements:

  • Minimum credit score of 620-680

  • Loan-to-Value (LTV) ratio of 70-75%

  • Property must be owned for at least 6 months

Loan Limits:

  • Loan amounts depend on the property value and equity

? Learn More About Cash-Out Refinance Options

8. HELOC Loans for Investment Properties

What Is a HELOC for Investment Properties?

A HELOC (Home Equity Line of Credit) allows investors to tap into the equity in their investment properties and use the funds for property improvements, debt consolidation, or future investments.

Eligibility Requirements:

  • Minimum credit score of 680 or higher

  • Combined Loan-to-Value (CLTV) ratio not to exceed 75-80%

  • Property must have significant equity available

? Learn More About HELOC Loans

Apply for an Investment Property Loan Today

Whether you’re purchasing a new investment property, refinancing an existing rental, or looking to cash out equity to reinvest, The Mortgage Calculator offers a variety of loan programs to meet your needs. Our team of mortgage experts can help you navigate the financing process and secure the best mortgage options for your real estate investment goals.

? Start Your Application Now

Frequently Asked Questions About Reconsideration of Value (ROV):