In this article, we will discuss and cover investment home loans with no income documentation. There are several different types of Investment Home Mortgage Loans. Government Loans cannot be used for investment homes and are for owner-occupant properties only.
Here are the three government loans:
- FHA Loans
- VA Loans
- USDA Loans
In this article, we will cover and discuss Investment Home Mortgage Loans And No Doc Investment Mortgages.
Conventional Loans Versus Portfolio No Doc Investment Mortgage Loans
Conventional Loans are the only loan program that second home buyers and investment home buyers can qualify with conforming loan programs. However, there are no doc investment property loans available. No doc investment property loans and bank statement loans are now available for real estate investors. Portfolio investment property loans are not strict like Fannie Mae’s 5 to 10 Financed Properties. There are various investment home mortgages.
Can You Buy a Second Home With No-Income Doc Loans?
If a homeowner wants to purchase a second home, there are certain criteria that would classify it as a second home. Otherwise, it would be classified as an investment home. If a home buyer wants to purchase a second home with a second home, it needs to make sense to lenders. If the second home is only a few miles away from the home buyer’s primary residence, it does not make sense to lenders. The lender would classify it as a second home. Conventional Second Home Loans require a 10% down payment. Conventional Investment Property Loans require a 20% down payment. You can qualify for a second home with non-QM no-income documentation loans.
Investment Home Mortgage Loan Versus Second Home Loan
Investment home mortgage loan programs have higher mortgage rates than second or vacation home mortgage rates. Second or vacation home mortgage rates are almost the same as an owner-occupied home’s rates. However, interest rates on investment home mortgage loans are much higher. If the second home were a waterfront property, that would definitely classify it as a second or vacation home. Sometimes it can still be classified as a second or vacation home. This holds true even if the home buyer’s primary residence is less than 100 miles from the second home.
Down Payment Requirements on Investment Properties
On most investment home mortgage loan programs, lenders require a 20% down payment. Down payments of less than 20% are available for investment home mortgage loan programs to borrowers with exceptional credit and strong income and assets.
Potential Rental Income on Investment Home Mortgage Loans
A great advantage for mortgage loan borrowers who can put a 25% down payment on an investment home is that 75% of the projected rental income can be used as qualified income. Potential rental income of the investment home can be used towards income for the mortgage loan borrower in qualifying for the investment home mortgage loans with Fannie and Freddie. This is important because of the investment home mortgage loans with borrowers with higher debt-to-income ratios. Even if the home buyer does not intend on renting the investment home, lenders will allow 75% of the market rent of the investment home to be counted as income in the proposed debt to income ratio of the new loan.
Fannie Mae 5 to 10 Financed Properties Versus No Doc Non-QM Loans
Fannie Mae limits the number of financed properties to 10 financed properties. Here are other restrictions and negatives with Fannie Mae 5 to 10 Financed Properties. The borrower needs to meet the 45% debt to income ratio FNMA Guidelines. Borrower credit scores need to be at least 720 FICO. With no doc investment property loans, the borrowers’ income does not matter since no income verification is required. The lender will just underwrite the property and is more concerned with the investment property’s potential cash flow. We have no doc fix and flip rehab loans where both the acquisition and construction can be financed. If you have any questions on investment home mortgage loans and no doc loans, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com.
This mortgage blog article post was last updated on June 29th, 2022
