Buying an investment property with is a high-leverage strategy that typically requires moving away from "big bank" conventional loans, which usually demand 15% to 25% down for non-owner-occupied rentals.
These loans qualify you based on the property’s rental income rather than your personal income. While 20% down is the industry standard, some niche DSCR programs allow 10% to 15% down if the property's cash flow is exceptionally strong (often a 1.20 DSCR or higher). 3. Creative Financing Strategies
Fannie Mae's HomeReady or Freddie Mac's Home Possible may allow as little as 3% to 5% down for multi-unit properties if you occupy one of them. 2. Specialized Investor & Portfolio Loans buying investment property with 10 percent down
Smaller local banks or credit unions often keep loans on their own books (portfolio loans). This allows them to offer 10% down terms for well-qualified investors with high credit scores (720+) and significant cash reserves.
You take a first mortgage for 80%, a second mortgage or HELOC for 10%, and provide 10% in cash. This avoids PMI and keeps the primary loan at a more favorable rate. Buying an investment property with is a high-leverage
If traditional lenders won't budge on the 20% rule, investors use "stacking" to reach the 10% out-of-pocket goal.
The most common way to get low-down-payment terms is to live in the property for at least one year. Specialized Investor & Portfolio Loans Smaller local banks
You get a standard 75% LTV loan from a bank and convince the seller to "carry" a second lien for 15%, leaving you to only bring 10% to the table .