Maximize Your Down Payment
Putting down more than 25% reduces risk and lowers the interest rate.
Rental Property Loan: Your Foundation for Real Estate Investment Wealth
Secure essential Rental Property Financing designed for investors, offering competitive rates and flexible terms to grow your portfolio.
What is a Rental Property Loan?
A Rental Property Loan (also known as a non-owner-occupied mortgage or Real Estate Investment Loan) is a specialized type of mortgage used to purchase or refinance a residential property that will generate rental income, rather than serving as the borrower's primary residence. These loans are underwritten differently from standard owner-occupied mortgages because they are viewed as a business venture.
Financing depends on the property’s income potential and the borrower’s financial strength.
A rental property loan separates investment debt from personal debt and supports portfolio growth.
A loan for rental property is designed to provide the capital to acquire income-generating assets.
Benefits of Rental Property Financing
Choosing a specialized Rental Property Financing option over attempting to use a mortgage for investments is a strategic move for serious investors. The benefits focus on long-term wealth building, portfolio diversification, and financial structure.
Portfolio Scaling
Avoid the conventional loan limits and work with Rize Mortgage to get rapid growth.
Leverage Asset Appreciation
Use the equity in your existing properties to fund down payments on new acquisitions.
Flexible Ownership Options
Set up your loan under an LLC or business entity for asset protection and liability management.
Diverse Property Types
Get funding for various residential properties, from single-family homes and condos to 2–4-unit buildings.
Competitive Rate Options
Pick loan options like 30-year fixed or adjustable-rate mortgages to fit your financial strategy.
Types of Rental Property Loans
The landscape of Rental Property Financing is broader than owner-occupied lending, offering tailored solutions to meet diverse investor needs. The type of Real Estate Investment Loan you choose depends on your qualifications and documentation preferences.
Conventional Investment Loan :
A 30-year fixed loan for borrowers with good credit, low debt, and simple tax documents.
DSCR (Debt Service Coverage Ratio) Loan :
This loan qualifies you on the property’s rental income, with little or no personal income needed.
Portfolio Loan :
Allows investors to finance multiple properties under one loan with flexible underwriting and terms.
Short-Term Rental Loan :
Specialized financing for Airbnb, VRBO, or other vacation rental properties.
Fix-and-Flip Loan :
These are short-term, higher-interest loans, which help you buy and renovate a fixer-upper.
Rental Property Loan Requirements
To ensure profitability and minimize risk, all Rental Property Loan Requirements emphasize strong down payments, ample reserves, and low financial leverage. We expect borrowers to demonstrate financial stability separate from the investment property's income.
Higher Down Payment
Expect to put down a minimum of 15% to 25% of the purchase price, as investment loans have higher risk.
Strong Credit Profile
A FICO score of 680 or higher is mandatory to secure the best rates and terms for a Loan for rental property.
Significant Liquid Reserves
Borrowers must show accessible cash reserves (6 months of PITI payments) for each financed.
Lower Debt-to-Income (DTI) Ratio
For conventional Rental Property Financing, a DTI ratio below 43% is generally preferred.
Established Homeowner Status
Many Real Estate Investment Loan programs require the borrower to already own a primary residence.
Appraisal and Rent Schedule
The property must appraise at the purchase price, and a rent schedule is needed to confirm income.
How to Get a Rental Property Loan with Rize Mortgage
Rize Mortgage specializes in matching investors with the right Rental Property Loan, from conventional financing to flexible non-QM products. We guide you efficiently through the asset-focused underwriting process.
Define Investment Strategy :
Contact a Rize loan expert to see the best financing options based on your income documentation.
Pre-Qualification Review :
We quickly review your financial profile to determine the maximum loan amount and optimal program.
Secure Competitive Terms :
We help you lock in the competitive interest rate and prepare the property-specific documentation.
Underwriting and Documentation :
Our team takes care of the appraisal and paperwork, verifying cash reserves and property income.
Closing and Funding :
After final approval, you finalize the paperwork, and the Loan for the rental property is funded.
Tips to Secure the Best Real Estate Investment Loan Terms
Securing the most favorable terms for your Real Estate Investment Loan requires preparation focused on financial health and property profitability. Follow these steps to get a rental property loan from Rize Mortgage.
1
Lower Your Personal Debt
Pay down credit card balances or high-interest debts to improve your personal DTI.
2
Build Cash Reserves
The more liquid assets above the minimum required make your application stronger.
3
Choose High Cash-Flow Properties
Prioritize assets where the projected rent significantly exceeds the PITI payment.
4
Maintain clean Financial Records
Ensure all your personal and business bank statements are clean and organized.
5
FAQ (Frequently Asked Questions)
Can you get a home equity loan on a rental property?
Yes, you can get a home equity loan on a rental property, but the requirements are usually stricter than for your primary residence. Lenders see rental properties as higher risk, so they may require more equity (often 25–30%), a stronger credit score, and solid rental income history. If approved, you can use the equity to renovate, buy another investment, or improve cash flow.
What types of properties are eligible for a Rental Property Loan?
Most lenders allow rental loans for single-family homes, condos, duplexes, triplexes, fourplexes, and certain multi-unit properties. Eligible properties usually include long-term rentals, short-term rentals (like Airbnb), and small multi-family units. Commercial buildings and large apartment complexes typically fall under commercial lending instead of residential investment loans.
Can I use the expected rental income to qualify for the loan?
Yes, many lenders let you use projected rental income to help qualify for a rental property loan. Expected rent is usually verified through an appraiser’s rent schedule (Form 1007) or market-rate analysis. Lenders typically use a percentage of that income (often 70–75%) toward your qualification to account for vacancies and expenses.
How is the interest rate for a Rental Property Loan determined?
Your rental property interest rate depends on your credit score, down payment, property type, DSCR (cash flow), and current market rates. Because investment properties are riskier than primary homes, rates are usually slightly higher. Properties with stronger cash flow or higher DSCR scores may qualify for better pricing. Larger down payments (25%+) can also help lower your rate.
Can I get a loan for a property that is already rented out?
Yes, you can get a loan on a property that already has tenants, and it may even help your application. Existing rental income provides lenders with proof that the property performs well. You’ll need to provide lease agreements, rent rolls, and sometimes deposit history to verify income. Many investors use this option to expand or refinance their growing portfolios.
Ready to Fund Your Next Investment Property?
A strategic Rental Property Loan is the engine that drives true real estate wealth. Don't let complicated financing slow your portfolio expansion.
