Real estate investor

Who this is for

• Buyers of a first rental property, or a tenth one.
• Owners of short-term rentals booked by the night or week.
• Investors who have already reached the ten-loan limit on conventional loans.

How it works, step by step

1. Conventional investment loans need 15% to 25% down, and they count 75% of expected rent as income.
2. DSCR loans qualify the property itself: divide the rent by the payment, which includes principal, interest, taxes, insurance, and HOA dues, and that ratio, called DSCR, should be 1.0 or higher, ideally 1.2.
3. Compare the true cost over your holding period, since a higher DSCR rate can still win if it lets you close the deal.
4. Portfolio and blanket loans, which cover several properties under one loan, exist for larger holdings.

Read next

• What is a DSCR loan?

  A DSCR loan qualifies a rental property by its rent, not your income. Here is the one ratio that decides if you qualify, and where the loan type comes from.

• What counts as a good DSCR ratio?

  A DSCR of 1.0 means the rent exactly covers the payment. Here is how to read your own ratio, in dollars, before you make an offer.

• What an investment property actually costs in fees

  Buying a rental instead of a home to live in adds a real, published fee on top of your credit-score fee. Here is the exact grid, in dollars.

  Try the calculator
• DSCR loan vs. conventional investment loan

  One side of this comparison is a published fee grid. The other is a reported, unverified rate range. Here is both, kept honestly separate.

• What a cash-out refinance on a rental property costs

  Pulling cash out of a rental stacks two fees on top of each other. Here is the exact combined fee, and the loan-to-value line where the option disappears.

  Try the calculator
• The ten-loan limit, and why investors use DSCR

  Fannie Mae caps most investors at 10 financed properties. Here is the exact rule, where the requirements get stricter first, and why it pushes growing portfolios toward DSCR.