Rental-property financing helps investors purchase or refinance income-producing residential real estate. Depending on the program, qualification may consider the property’s rental income and expenses in addition to the borrower’s financial profile.
These programs are designed for investment properties rather than primary residences.
Investors use rental-property loans to acquire stabilized properties, refinance existing debt, transition completed renovation projects into longer-term financing or access equity for additional investments.
The appropriate program depends on the property type, rental income, current occupancy, borrower experience and long-term investment plan.
Rental financing may be considered for:
DSCR stands for debt service coverage ratio. It compares a property’s qualifying rental income with its required loan payments and certain property expenses.
Some investor loan programs use the property’s cash-flow potential as an important qualification factor instead of relying primarily on the borrower’s personal employment income.
The exact calculation and required coverage vary by financing provider and property type.
Rental-property financing may be used to:
Some rental programs place greater emphasis on property rental income, but personal financial information, credit and liquidity may still be reviewed.
Potentially. Investors often refinance a renovated property into longer-term rental financing once the work is completed and the property is ready to lease or already producing income.
Certain short-term rental properties may be considered. Eligibility depends on the location, property history, expected revenue and applicable program requirements.
Business entities commonly own investment properties. Entity documents and personal guarantees may be required.
Cash-out refinancing may be available when sufficient equity exists and the proceeds are intended for an eligible business purpose.
No. The programs described on this page are intended primarily for non-owner-occupied investment properties.