Portfolio Rental Loan

Enjoying the hot, hot, hot rental market? Expand your business with a portfolio investment loan. These rental property loans will help you buy more properties or refinance rental properties you currently own. The minimum loan is $700,000 and 7 rent-producing units, and there is no upper limit. These are blanket loans, so you can buy and sell individual properties without triggering a due-on-sale clause. This can be a great opportunity to grow your rental business exponentially.

Portfolio Rental Loans are especially attractive for investors who…

  • Already have two years of experience owning and managing rentals.
  • Have a credit score above 660. Borrowers with scores above 680 may qualify for lower rates.
  • Have enough cash to cover at least 6 months of debt service.

These loans feature:

  • Room to grow

    Portfolio loans have a minimum loan amount of $700,000 and can go as high as $100MM.

  • Attractive terms

    Both 5-year and 10-year terms are available with a balloon due at the end of the term. Loans can be amortized for up to 30 years. Interest-only investment property loans also are available.

  • Financing for inexpensive properties.

    Multi-family properties can be worth as little as $30,000 per unit in most areas.

  • No verification of personal income.

    Loans are based on cash flow. You will have to prove that you have sufficient cash and/or cash equivalents.

  • Nationwide coverage.

    Loans are available in every state but Alaska, North Dakota, South Dakota, Utah and Vermont.

  • Time to find renters.

    If a property you are buying isn't currently available for lease, we give you 180 days to find a tenant and move them in.

Frequently Asked Questions

What are the advantages of a rental portfolio loan?

Rental property financing is based on the value of the portfolio and the cash it generates. The more valuable the assets, the higher the loan-to-value ratio, and there may be a reduced interest rate for strong properties in a good market. These are blanket loans, meaning the entire portfolio is covered by one loan, so you can buy and sell individual properties without facing a due-on-sale clause. The underwriting of the loan doesn’t verify the borrower’s personal income or require W-2 forms for loan approval. You will have to pass credit and background checks. Rates are very competitive and based on the factors that include an analysis of value and cash flow.

Must I buy or refinance a minimum number of properties?

Yes, you must be investing in at least 7 rent-producing properties. There is no cap on the number of properties you can own.

What kinds of properties can I finance?

5- to 20-unit multi-family properties, single-family detached residences, 2- to 4-unit residences, condos and townhouses.

What kinds of properties can't be financed?

Vacation rentals, mobile homes and hotel/motels, even those with long-term tenants.

May I live in one of the properties?

No. Neither the borrowers nor members of their family can live in the properties that are financed.

Can I hold the properties in an LLC or a trust?

Portfolio buyers must close in an LLC.

Can I stick with my current insurer?

Yes, with some caveats, as the policy will have to meet our requirements. Among other things, insurance for portfolio loans must include $1MM per occurrence and $2MM general aggregate per location. No policy aggregates. If your current insurance company can’t meet these requirements, we can offer alternatives.

Must I carry flood insurance?

If any part of the property is in a flood zone, you must purchase flood insurance that is the lowest option out of the loan amount, replacement cost or the maximum amount available through the National Flood Insurance Program. The deductible must not be less than 2.5 percent of the portfolio’s insured value.

Will you lend to foreign nationals?

Yes, with some restrictions. For these loans, the maximum loan to value is 65 percent, and the loan will be non-recourse. There may be higher fees and some cash management guidelines.

Why Finance of America Mortgage?

We’re not about pushing loan papers. We’re about moving your dream forward. And we do that through knowledgeable local advisors, a personal approach, and a variety of smart loan options.

Learn More About Why Finance of America Mortgage?

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