Rental property financing sold to Fannie Mae or Freddie Mac require a down payment ranging from 10% to 25% with a rental property financing fee ranging from 1.5 to 3 points. Please understand that these fees are imposed by Fannie and Freddie and are not charges from either your lender or your broker. However, the fee allows using conventional rates and loan limits on your rental property. These conforming rental property loans are available as either fixed rate or an ARM. Even with the delivery fees, these loans can be a good choice if your goals are to maximize cash flow and you plan to hold the property for a 3 to 5 year period. Ratios are normally 28/36, but with automated underwriting, excellent credit and some liquid reserves, it is not uncommon to see back ratios in the middle 40s. Rental property income is decreased by a 25% vacancy factor but there are underwriting methods which eliminates this issue for experienced investors.
The Investor Loan Specialty program (actually a growing group of investor loan programs) allows purchase or refinances with only 5% equity. The program allows up to 20 properties plus your home. Available up to $1,000,000 and 2-4 unit properties are acceptable. Ratios are generally 34/40 and No Documentation loans are available.
Zero down real estate investment financing for rental property is now available with fairly reasonable rates. These programs have been available for a while, but at extremely high rates compared to market rates. We finally have a source of financing that will allow you to acquire property with limited out of pocket costs.
In 2008, Short Sales are where most of the action in real estate is. Learn more about Short Sales
I have a page on how to calculate your qualification ratios.
I have a page on documentation requirements.
If your interest is in foreclosures as a real estate investment, visit my foreclosure properties
If you are looking at foreclosures as an investment, I have a free report available by email.
Here are my thoughts on the difficulty of "flipping" real estate.
For the the greatest flexibility and maximum loan qualifying ratios, you may be interested in the Cash Flow ARM for rental property.
New! I have added a page on how to properly compare different rental property that may be helpful to you
If the building you are looking at contains 5 or more units, you will need commercial loans.
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As a Certified Mortgage Planning Specialist, I offer an analysis of your situation today can make suggestions on how small changes in how your consumer and mortgage debt is structured today can have a life changing effect in the years to come. Read more about this free, no obligation service.
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