Investment financing starts with the business case.
Investment-property loans are underwritten differently from a primary-residence mortgage. Down payment, reserves, property cash flow, credit and the number of financed properties can all matter.
DSCR programs generally focus on the property’s rental income relative to its housing expense, while conventional investment loans also evaluate the borrower’s personal income and debts.
We compare financing structure with the property strategy — long-term rental, small multifamily, portfolio growth or another eligible use — before choosing a path.
How It Works
Four steps from property to financing structure.
The goal is to know whether the numbers work before the file gets complicated.
1
Review the Property
Purchase price, unit count, expected rent, taxes, insurance and HOA if applicable.
2
Choose the Loan Path
Compare conventional investor financing, DSCR and other available options.
3
Verify Cash + Reserves
Confirm down payment, closing funds and post-closing reserve requirements.
4
Underwrite + Close
Complete appraisal, lease/rent review and lender conditions before settlement.
Property Math
Estimate the property’s DSCR.
A quick illustration of gross monthly rent divided by monthly housing expense. Program calculations can differ by lender.
Illustrative DSCR1.20Rent is 120% of the entered monthly housing expense.
Illustrative only. Lenders may use different rent, expense, vacancy and qualification rules.
Why it matters
The property has to support the financing strategy.
DSCR programs generally focus more heavily on property cash flow than traditional borrower DTI, but pricing, reserves, credit, property type and documentation still matter.
Financing Paths
Common ways investors finance eligible properties.
CONVENTIONAL
Conventional investment loan
Traditional financing using borrower income, credit, assets and property type.
DSCR
DSCR financing
Investor program that generally emphasizes property cash flow rather than traditional personal DTI.
MULTI-UNIT
2–4 unit financing
Financing may vary depending on occupancy, unit count and whether the property is held as an investment.
PORTFOLIO
Portfolio / non-agency options
Some lenders offer programs outside standard agency guidelines for qualifying investment scenarios.
FAQ
Common questions.
What is DSCR?+
Debt Service Coverage Ratio compares qualifying rental income with the property’s qualifying monthly housing expense. Lender calculations and minimums vary by program.
How much down do I need for an investment property?+
It depends on property type, loan program, credit, reserves and other factors. Investor loans typically require more equity than a primary residence.
Can I close in an LLC?+
Some investor programs may permit entity vesting, while conventional agency financing generally has different rules. Confirm the planned ownership structure with the lender, title professionals and your attorney before transferring or taking title.
Do projected rents count?+
Programs may use leases, market-rent appraisal data or other documentation. The allowable amount depends on the program and property status.
