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Mortgage Loans For Investment Homes And Commercial Properties

Gustan Cho Associates are mortgage brokers licensed in 48 states

This article is about Mortgage Loans For Investment Homes And Commercial Properties 

There are several types of mortgage loans for investment homes and commercial properties.

  • The investment home purchaser has two type programs of mortgage loans for investment homes
  • The first type of investment home mortgage loan is a 20% down payment conventional investment mortgage loan
  • Conventional Loans need to conform to Fannie Mae and/or Freddie Mac Mortgage Guidelines
  • With a 20% down payment investment home mortgage loan, borrowers cannot use the future rental income when qualifying for the investment home mortgage loan
  • Conventional Investment Home Loans require borrowers credit, income, assets, and liabilities
  • Borrowers of investment mortgages with Fannie/Freddie would have to have qualifying monthly gross income and debt to income ratio of borrowers need to qualify
  • In order to qualify for the investment home mortgage loan without using the potential rental income with Fannie Mae and/or Freddie Mac, larger down payment is required.
  • If the housing expenses on the new loan cause borrower’s debt to income ratio to exceed the mortgage lender’s debt to income ratio guidelines, the borrower needs to consider putting down 25% in order to use 75% of the potential rental income on the new investment property purchase
  • Mortgage loans for investment homes have higher mortgage rates than primary owner occupant and second home mortgage loans

Mortgage Loans For Investment Homes Using Future Rental Income to Qualify

What are the mortgage loans for investment houses and commercial real estate?

If the investment home buyer puts a 25% down payment on his or her purchase, they can use 75% of the rental income.

  • If the investment home is vacant, they can use the 75% of the potential rent determined by the appraiser
  • Putting 25% down on an investment home will also reward the investment home mortgage borrower with much better mortgage rates

There are pricing adjustments on mortgage rates between putting 20% down and 25% down on an investment home.

Alternative Investment Home Loans

What are the alternative housing loans?

There are no doc investment property loans and hard money loans for real estate investors. Hard Money Loans is a great source for seasoned real estate investors, real estate developers, and property flippers to utilize for short term financing.

  • Hard Money Lenders normally require 20% to 50% down payment 
  • Interest rates can be anywhere between 7% to 15%
  • However, income, tax returns, and debt to income ratios do not factor in when qualifying for hard money loan 
  • Hard Money lenders are more concerned with the equity in the property than the actual borrower or borrower’s credit or income
  • Sometimes investment home buyers with perfect credit use hard money lenders to get financing because many times the property is not bankable due to borrower not qualifying
  • What happens is that the investment property investor pays the higher interest rates to do the acquisition of the property, will rehab it, and then sell it?
  • Situations above will be ideal for real estate investors to close with short term hard money rehab loan
  • After rehab is done, pay off the hard money lender by selling property or finance it with an end lender at much lower interest and keep the property as an income-producing rental property
  • Hard money lenders are short term investment property lenders
  • The team at Gustan Cho Associates are experts on FHA 203k loans, is a full service residential and commercial lender where they help their hard money loan borrowers find an exit strategy

The team at Gustan Cho Associates are experts in mortgage loans for investment homes and commercial financing.  Real Estate Investors who have any question on mortgage loans for investment homes, please contact us at 800-900-8569 or text us for a faster response. Or email us at  You can subscribe to our newsletter at .

Gustan Cho, NMLS ID 873293

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