Income property financing sold to Fannie Mae or Freddie Mac require a down payment ranging from 10% to 25% with an income property financing fee ranging from 1.5 to 3 points. Please understand that these financing 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 financing limits. These conforming income property financing loans are available as either fixed rate or an ARM. Even with the financing fees, these income property loans can be a good choice if your goals are to maximize income 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 income is decreased by a 25% vacancy factor but there are underwriting methods which eliminates this issue for experienced property investors.
The Income Property Financing Specialty program (actually a growing group of income property 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 a No Documentation loans program is available.
100% income property
financing 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.
I have a page on how to calculate your mortgage ratios.
I have a page on mortgage documentation requirements.
Limited and No Documentation loans are now available.
If the building you are looking at contains 5 or more units, you will need commercial loans. We can still help you with your needs.
If your interest is in foreclosures as a real estate investment, visit my foreclosure page for information and links to other resources.
Here are my thoughts on the difficulty of "flipping" investor properties.
For the the greatest flexibility and maximum loan qualifying ratios, you may be interested in the Cash Flow ARM. This may be the very best option for an investor.
New! I have added a page on how to properly compare different investment property that may be helpful to you
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.
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.
Prequalify for your
Financing income property.