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Financing

Conventional Mortgage

Conventional Mortgage

A standard bank loan not backed by a government agency. The most common financing for investment properties.

Key Terms

  • Down Payment: 20-25% for investment properties, 5-20% for primary residence
  • Interest Rate: Typically 0.5-0.75% higher than primary residence rates for investment properties
  • Loan Term: 15 or 30 years (30-year most common)
  • PMI: Required if less than 20% down on primary residence

Qualification Requirements

  • Credit score: 620+ (740+ for best rates)
  • DTI ratio: Under 43-45%
  • Cash reserves: 6 months of payments per property
  • Stable income documentation (2 years)

Investment Property Limits

Fannie Mae/Freddie Mac allow up to 10 financed properties per borrower, though requirements tighten after 4.