What Are the Requirements for an Investment Property Loan?
For a conventional loan, the main ones are a down payment of at least 15% on one unit or 25% on 2 to 4 units, six months of reserves, a debt-to-income ratio the lender can approve, and a credit score that fits the loan. Fannie Mae and Freddie Mac publish the rules, and lenders that sell loans to them work within those rules.
Last updated October 21, 2026Down payment
Freddie Mac allows up to 85% loan-to-value on a one-unit investment property purchase and 75% on 2 to 4 units, for loans with an Accept from its automated underwriting. That means 15% or 25% down. See how much down payment you need.
Credit score
Fannie Mae's Selling Guide sets a minimum of 620 for fixed-rate loans and 640 for adjustable-rate loans. For files run through its automated underwriting, it sets no fixed minimum and assesses your credit as part of the overall review. Your score also feeds into the price.
Debt-to-income ratio
Fannie Mae's maximum is 50% for files run through its automated underwriting. For manually underwritten loans it's 36% of stable monthly income, or up to 45% when you meet its credit score and reserve requirements.
Reserves
Fannie Mae's automated underwriting requires six months of reserves on an investment property transaction, and more when you have other financed properties. Freddie Mac's investment property page notes additional requirements for reserves as well.
How the rent counts
On a conventional loan the rent helps, but it's discounted. Fannie Mae's guide counts 75% of the gross monthly rent on a long-term rental purchase, then subtracts the property's full payment; one- to four-unit investment properties are eligible to use rental income. See DSCR vs. a conventional investment property loan for a worked example.
How many you can finance
Fannie Mae caps a borrower buying an investment property at 10 financed properties in its automated underwriting.
If these don't fit
A DSCR loan qualifies on the property's rent rather than your income or debt-to-income ratio, with each lender setting its own terms.
| Down payment | 15% on one unit, 25% on 2 to 4 units (Freddie Mac, automated Accept) |
|---|---|
| Credit score | 620 fixed or 640 adjustable at Fannie Mae; no fixed minimum in its automated underwriting |
| Debt-to-income | Up to 50% in Fannie Mae's automated underwriting |
| Reserves | Six months on an investment property (Fannie Mae automated underwriting) |
| Rental income | 75% of gross rent, less the full payment, on a long-term rental purchase |
| Financed properties | Up to 10 for an investment property borrower (Fannie Mae) |
Related questions
Sources
- https://sf.freddiemac.com/general/maximum-ltv-tltv-htltv-ratio-requirements-for-conforming-and-super-conforming-mortgages
- https://sf.freddiemac.com/working-with-us/origination-underwriting/mortgage-products/investment-property-mortgages
- https://selling-guide.fanniemae.com/sel/b3-5.1-01/general-requirements-credit-scores
- https://selling-guide.fanniemae.com/sel/b3-6-02/debt-income-ratios
- https://selling-guide.fanniemae.com/sel/b3-4.1-01/minimum-reserve-requirements
- https://selling-guide.fanniemae.com/sel/b3-3.8-02/rental-income-subject-property
- https://selling-guide.fanniemae.com/sel/b2-2-03/multiple-financed-properties-same-borrower
Sourced from licensed loan officers and brokers in the FreeRateUpdate network.
Educational information only, not individualized financial or legal advice. Program details and rates change; verify current terms with a licensed loan officer before making a decision.