Investment property loans typically require 10% to 20% down (sometimes more), a credit score in the mid-600s or higher, and several months of cash reserves. Rates usually run higher than on a primary residence. You need one because most standard mortgage programs won’t finance a home you don’t plan to live in — and many won’t let you count rental income, current or projected, toward qualifying.

What are investment property loans?

“Investment property loan” is a catch-all term for mortgage loans used to finance the purchase of an investment property: a rental property, a fix-and-flip, or some other type of property you intend to use as a source of income.

Though some traditional mortgage programs allow you to buy income-producing properties, not all do — and even then, there can be catches.

Types of investment property loans

When financing an investment property, you have many options like conventional loans, fix-and-flip loans, non-QM loans, and DSCR loans. The right choice will depend on your lender, financial situation, and goals as an investor. Here are some options:

Conventional loans

You can use conventional mortgages to pay for investment property purchases, including one-, two-, three-, and four-unit properties. You’ll need a debt-to-income ratio (DTI) of 50% or less to qualify, a credit score between 620 and 680, depending on your lender, and a loan-to-value ratio (LTV) no higher than 75 to 85% (this varies based on how many units there are in the property). You also can’t be affiliated with the builder, developer, or seller of the property if the home is new construction.

Keep in mind: Fannie Mae does have a 10-financed-property limit when it comes to second homes and investment properties, so you’ll need to consider a different loan type if you want a portfolio of 11 properties or more.

Fix-and-flip loans

Fix-and-flip loans are designed for home flippers who intend to purchase, renovate, and resell a property at a profit. These let you finance the purchase price and updates all in one loan. They are short-term loans that must be repaid within a few years (typically after you sell the property). 

Qualifying for these loans is a little different than with other investment mortgages, as the lender will also look at your plans and budget for the home and your experience in flipping and renovating properties. The lender will also calculate the after-repair-value (ARV) of the property to determine how much you can borrow for it. 

Generally speaking, fix-and-flip loans allow for LTVs between 70 and 90% and down payments as low as 10% to 25%. They typically require credit scores in the mid-600s or higher and around three to six months in cash reserves. They are usually short-term loans that last six months to 18 months.

Non-QM loans

Non-QM loans — or non-qualified mortgages — are types of mortgages that don’t have to adhere to standard loan program requirements set by the Consumer Financial Protection Bureau. This gives lenders a little more leeway in whom they can lend to and how much they can lend.

There are many different subsets of non-QM loans that investors may find helpful, including:

• Bank statement loans: Bank statement loans are a good option for self-employed borrowers. They let you qualify for your loan based on trends in your bank account rather than traditional income documents like pay stubs, W-2s, or tax returns. For these, you typically need a 10% to 30% down payment, a 620 to 700 credit score or higher, and a DTI of 43% to 50% or lower. You’ll also need to provide 12 to 24 months of bank statements.
• DSCR loans: DSCR loans — or debt service coverage ratio loans — allow you to qualify based on the property’s potential cash flow or future rental income, and you don’t need to provide personal earnings or employment information to be eligible. We’ll go into these loans in more detail below.
• Asset qualifier loans: These loans look at your total liquid assets, including retirement accounts, business accounts, and more. The lending decision isn’t based on your employment, income, or DTI ratio. Requirements vary by lender, but you’ll usually need a credit score of at least 660 to 700 and a down payment of 10% to 25%. There is often no hard DTI maximum.
• P&L loans: Profit and loss loans base your eligibility on your business’s profits and losses over a certain period. They can be helpful if you’re a seasoned real estate investor or small business owner. You’ll typically need at least a 640 to 700 credit score and a 20 to 25% down payment for a P&L loan.

Other types of non-QM loans could be a good fit too, depending on your financial situation. Talk to a mortgage broker if you need help finding the right product. They can point you in the right direction.

DSCR loans: Requirements, rates, and how to qualify

DSCR (Debt Service Coverage Ratio) loans are an option if you’re buying investment properties to turn into rentals. These allow you to use rental income to qualify for the loan, rather than qualify on your income or tax returns on your own.

DSCR loans typically have rates similar to traditional mortgages (between 6.5% and 8%, as of September 2026) and require a Debt Service Coverage Ratio of 1.0 to 1.25 — meaning your property’s monthly rent is 1 to 1.25 times more than its PITIA (principal, taxes, insurance, and association dues).

To calculate your DSCR, you take your monthly rent and divide it by your PITIA costs for the property. Here’s an example: Say your property brings in $3,000 per month. If your PITIA adds up $2,500, your DSCR would be 1.20 (3,000 divided by 2,500). This would meet the threshold for some DSCR loans. 

You will also typically need a 20 to 25% down payment in most cases, though you may need more if your DSCR or credit score is lower. Most lenders require at least a 620 to 680 credit score.

Hard money loans

Hard money loans, sometimes called bridge loans, are collateral-based loans. These are usually easy to qualify for and offer quick funding, but they must be repaid quickly — typically within six months to a few years.

Finding hard money loans at traditional banks can be difficult, but private lenders and investment companies often offer them. They can be a good choice if you can’t qualify for other mortgage options. Typically, hard money loans won’t have hard-and-fast credit score requirements, though you’ll need at least a 10 to 40% down payment.

Home equity loans and HELOCs

If you own any other properties, home equity loans can help you pay for your next investment. These let you borrow from the equity in your current property, which you can then use to cover the price of your new property.

You might also use these in tandem with other mortgage options, using the home equity loan to cover your down payment and another mortgage to finance the remaining purchase amount.

You could also consider a home equity line of credit (HELOC), which is similar to a home equity loan in that both are second mortgages that let you tap your home equity. It’s good to explore both options, but a home equity loan might make more sense for a down payment — you’ll receive all the money in one lump sum, whereas a HELOC lets you draw money over a period of time as you would with a credit card.

For home equity products, DTI limits are usually 43 to 55%, and you’ll need at least 15% to 20% in home equity and a minimum credit score of 620 to 680.

FHA loans

You can technically purchase an investment property with a Federal Housing Administration (FHA) loan, but only in certain scenarios. For example, if you have to relocate for a job, you can rent out your first home when you move as long as you’ve lived in the house for at least a year. You can also buy a multiunit property and then live in at least one of the units to qualify. This is often referred to as “house hacking.” 

If you have an FHA loan or are considering using an FHA loan to buy a home you hope to use as an investment later, talk with your mortgage lender about your options. You will need between a 3.5 and 10% down payment, depending on your credit score (the former if you have a 580+ score and the latter if it’s under 580). 

Portfolio loans

Portfolio loans allow you to finance the purchase of multiple investment properties — often rental properties — all at once, with one single loan. This means you only have one monthly payment for all your properties. These are sometimes referred to as rental portfolio loans or blanket loans because they cover multiple properties under a single financing “blanket.”

For these loans, you will usually need a credit score of 660 to 680 and a 20 to 25% down payment. You may need to meet a minimum occupancy rate for your properties, too. 

Seller financing

Seller financing is when the seller of a property acts as the lender for the purchase. In this arrangement, instead of sending a mortgage company or bank a monthly payment, you’d instead make a payment to the seller. Terms, interest rates, and requirements can vary widely in seller financing, as they are determined by individual sellers and buyers and negotiated on a case-by-case basis.

Types of investment property loans summary

Loan type	Down payment	Min FICO	Typical rate	Term	Best for
Conventional	15% (1-unit)25% (2-4 unit)	620-680	Primary + 0.5-1.0 pt	15 / 30 yr	Buy-and-hold with documentable W-2 income
DSCR	20-25%	620-680	~6.5-8%	30 / 40 yr,5-yr ARM	Investors qualifying on rent, not personal income
Hard money	10-40%	Flexible	~10-15% + 2-4 pts	6-36 mo	Speed, distressed property, weak credit
Fix-and-flip	10-25%	650+	Double digits	6-18 mo	Purchase + rehab in one loan
Bridge	20-35%	650+	Above conventional	3-12 mo	Buying before an existing sale closes
Bank statement	10-30%	620-700	Above conventional	30 yr	Self-employed without clean tax returns
HELOC / HEL	n/a (equity)	620-680	Varies	10-30 yr	Funding a down payment from existing equity
FHA (owner-occ.)	3.5%	580+	Lowest	30 yr	House hacking a 2-4 unit you live in
Portfolio loans/blanket loans	20-25%	660-680	Starting between ~5-8%	5-30 yr	Buying multiple properties at once
Non-QM loans	10-30%	620-700+	Varies	30-40 years	Self-employed borrowers, rental property owners, business owners

What to expect with investment property loans

Lenders tend to be more cautious about investment loans. Investors depend on the property’s income to make payments, which means they could have trouble paying their mortgage if there’s a vacancy or a tenant fails to pay rent.

On top of this, investors tend to have less skin in the game. Unlike a traditional home buyer — who needs their property to live in — investors aren’t necessarily as attached to their properties. This could make them more likely to default if they start having financial difficulties. 

As a result, lenders are often stricter when financing an investment property. This means you may have to deal with the following:

Higher interest rates

A higher interest rate helps lenders compensate for the extra risk of investment property loans. Rates vary depending on your personal finances and mortgage lender, but you can generally expect investment property mortgage rates to be 0.50% to 1.5% higher than rates on traditional mortgages, depending on your down payment. For instance, with 25% down, your rate may only be 0.5% higher, but with a 20% down payment, the interest rate premium may be 1.5% compared to a traditional mortgage. Either way, the premium can equate to a much higher monthly payment and significantly more long-term interest.

Bigger down payment requirements

Lenders may also require larger down payments on investment property purchases. This ensures the borrower has more money on the line in the transaction and means the lender is on the hook for less cash if the borrower defaults.

You will likely need a down payment of at least 15% to 25% of the home’s purchase price. This is significantly more than the 3% to 3.5% minimum required on most mortgages.

Bigger cash reserves

Finally, you might also need more cash in savings if you’re going to get an investment property mortgage. This money can serve as a financial safety net if you ever have trouble paying your mortgage (or your tenants skip out on rent for a month, for example). You can expect to need up to 12 months’ worth of mortgage payments in reserves, according to US Bank.

Using rents to qualify

Some investment property loans allow you to use rent payments or future rent payments to qualify. Typically, lenders will abide by the 75% rule on this income — meaning they’ll only count 75% of your expected rent in order to account for vacancies. You’ll also need to document the rent with a signed lease from the tenant or Form 1007 (Fannie Mae) or Form 1000 (Freddie Mac). This allows an appraiser to use comparable rental properties in the area to determine what rent you can expect to bring in from your purchase.

LLC vs. personal name financing

Depending on what type of investment property loan you use, you may be able to finance your purchases in either your personal name or the name of your company or LLC. Buying in an LLC name will protect you and your finances personally from liability, and there may be tax advantages, too. But it typically comes with stricter qualifying requirements and higher interest rates. You also may have a harder time finding loan options. 

Where to get investment property loans

There are many lenders that specialize in serving investors and rental property owners. These often offer investor-specific programs like DSCR loans, bank statement loans, and fix-and-flip loans, to name a few. 

Some of these specialty lender options include: 

Lender	Loan types offered
Angel Oak Mortgage Solutions	Non-QM loans, bank statement loans, DSCR loans, asset qualifier loans, P&L loans
Griffin Funding	Bank statement loans, P&L loans, DSCR loans, hard money loans, fix-and-flip loans, home equity loans, HELOCs, non-QM loans, asset qualifier loans, conventional loans, FHA loans
Visio Lending	DSCR loans, portfolio loans
Kiavi	Non-QM loans, DSCR loans, fix-and-flip loans, bridge loans

You can also look to traditional lenders, particularly if you’re considering using a more common loan program like a conventional or FHA mortgage. Some options include Chase, US Bank, and Pennymac.

Whatever lender you choose, the application process for an investment property loan should be similar to any traditional mortgage. You’ll need to fill out the lender’s application, provide documentation, and have the home appraised. 

In some cases, you may need to provide additional documentation regarding your finances or your history as a landlord or investor when applying. If you already own some income-producing properties, you may also need to provide copies of your current leases and proof of past rental payments from your tenants.