Financing · typical requirements
Know your down payment before you shop.
Investment and second-home loans work differently from a primary home. These are typical minimums. Your lender sets the actual terms.
10%
Second home, conventional
15%
Investment, conventional, 1 unit
20–25%
DSCR loan, where the rent qualifies
25%+
Non-warrantable condo or foreign national
01 · Loan types
Side by side.
| Loan | Down payment | Credit (typical) | Reserves | Rent helps you qualify? | Good for |
|---|---|---|---|---|---|
| Cash | 100% | — | — | — | Fastest close; some deals are cash only |
| Conventional, investment | 15% (1 unit) 25% (2–4 units) | 620+; best pricing 700+ | 6 months of payments | Yes, 75% of long-term rent. Short-term rent at 50% if licensed (Fannie Mae, by Dec 2026) | Long-term rentals |
| Conventional, second home | 10% (1 unit) | 620+; best pricing 700+ | 2 months | No. Occasional renting only; no rental pools | A winter home you mostly use yourself |
| DSCR | 20–25% 25–30% for STRs | ~660; best pricing 700+ | 3–12 months | Yes. The property's rent is what qualifies | LLC buyers, self-employed, several properties |
| Portfolio / non-warrantable | 25–30%+ | Varies | Varies | Varies | New condos, condo-hotels, unusual deals |
| Foreign national | 25–40% | US credit often not required | 6–12 months | On DSCR versions | Buyers without US residency |
| FHA · VA · USDA | Primary residence only. Not for investment purchases. (Living in one unit of a 2–4 unit is allowed.) | ||||
Typical ranges from Fannie Mae and Freddie Mac guidelines and lender programs. Guidelines change, and every lender differs.
02 · 1031 exchange
Selling one investment to buy another?
- Identify the new property
- Within 45 days
- Close on it
- Within 180 days*
- Who holds the money
- A qualified intermediary
- Property type
- Held for investment
*Or your tax return due date, if that comes first. Set it up with your CPA and intermediary before you sell.
03 · What catches investors
- Builder rate promos are usually for owner-occupants who use the builder's lender.
- Builder credits are capped at 2% of the price on a conventional investment loan, against up to 9% for a home you live in.
- New condos need at least half the units sold to owner-occupants or second-home buyers before conventional financing. Until then: 25–30%+ down with a portfolio lender.
- Condo-hotels and rental pools don't qualify for conventional loans.
- Model leasebacks. Some are cash only. Investors typically put 50%+ down so the lease rent covers the payment and carrying costs. Models can appraise below the price. How leasebacks work
- LLCs. Conventional loans close in your name. DSCR loans can close in an LLC.
- Insurance and flood. Get quotes before you sign.
Talk to a lender first.
We're not lenders and can't pre-approve you, quote rates or promise terms. A pre-approval or proof of funds is the first thing builders ask for, so it's the best place to start.