If you are buying your first single-family rental property, now’s a good time to get an investment loan. Single-family rental loans have enormous advantages for specific circumstances when compared to conventional mortgage loans. First, they are based on cash flow — not personal income. And they are designed for people who plan on buying investment property and renting it out for a long time, which can give you financial stability and confidence.
Single Rental Loans are especially attractive to…
- Have a cash cushion. The more cash you are able to put into the deal, the lower the investment loan interest rates.
- Have a better-than-average credit score. You’ll need much stronger credit than you would if you were seeking a home mortgage.
- Don’t want to provide proof of income. The lending decision is based on the value of the property.
These loans feature:
Chances to break into the business
Investment property loans are available to both first-time and veteran landlords.
Small loans for new landlords
The property must be worth at least $100,000 in order to qualify.
Variable loan amounts
Depending on the value of the property, you'll be able to borrow between $75,000 and $1.5 million.
Manageable cash-flow requirements
For properties worth more than $150,000, personal debt to income (PDTI) can't exceed 85 percent. For properties worth less than $150,000, PDTI can't exceed 70 percent.
Get an idea of what your monthly mortgage payment may be, including costs associated with your mortgage such as property taxes, homeowners insurance, and Private Mortgage Insurance (PMI), if applicable.
Recalculate your new house payment based on loan amounts, interest rates, and other factors, to see if refinancing your mortgage is a smart financial move.
Calculate how much house you can afford. Get an estimate for a mortgage amount that may fit comfortably within your budget.
Frequently Asked Questions
We consider borrowers who are jumping into the rental investment pool for the first time, and we also have clients who own hundreds of rental properties.
Non-owner occupied: Single family residences, 2-4 family units, condos and townhouses. (5 to 20 unit multi-family rentals will only be considered as portfolio investments.)
Properties worth less than $100,000, manufactured housing, hotel/motels, even those with long-term tenants, and mobile homes.
We don’t consider personal debt and income ratios. Instead, we evaluate the loan based on a commercial real estate underwriting approach. Our lending decisions are based on the collateral and cash flow of the assets. These loans are assumable, unlike most conventional mortgage loans. And unlike conventional lenders, we prefer that properties be placed in an LLC or some other corporate financial structure to protect the borrower’s personal finances.
Loans are not available in Alaska, North Dakota, South Dakota, Utah, or Vermont.
Multi-family properties 30 years or older can’t be amortized for longer than 25 years.
No. These loans are for investment properties only. Properties financed with a single family loan also can’t be rented to a borrower’s family members.
Yes, we do, but there are some restrictions on where they can be from, and they may be required to undergo additional background checks. Single-family loans to foreign nationals are restricted to a maximum loan to value of 65 percent.
You can borrow between $75,000 and $1.5MM, depending on the property and its location.
You have questions, we have answers.
Together, we’ll find great mortgage solutions.
Schedule a talk with a mortgage advisor or leave a message. We’ll get back within one business day.
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.