Investment Property Loans

An investment property loan finances a home you will rent out instead of live in. There are two main ways to qualify: a conventional loan based on your personal income, or a DSCR loan based on the property's rental income. A second home you use yourself is a third category with its own rules.

Justin Lazzaro, NMLS #1229453 | Reasy Financial, LLC, NMLS #2446155 | Licensed in Arizona, Pennsylvania, Florida, and Texas

Who these loans fit

The right structure depends on how your income shows up on paper and how many properties you plan to own.

Investors with documented income

If your tax returns and pay stubs support it, a conventional investment loan is usually the lower-cost route.

Investors whose returns understate income

Self-employed investors and those with several properties often qualify more easily on the rent through a DSCR loan.

Who it usually does not fit

If you plan to live in the home, even part of the year as your main residence, an owner-occupied loan will cost less.

How qualifying works

1

We define the occupancy

Primary home, second home, or rental. Each has different pricing and rules, and the application has to state it accurately.

2

We pick the qualifying method

Personal income and debt ratios for a conventional loan, or the property's rent compared with its full housing payment for a DSCR loan.

3

Reserves are verified

Lenders want to see cash left over after closing, and the requirement grows with each financed property you own.

DSCR loans are business-purpose loans, and you and your family cannot live in the property. Some lenders close them in an LLC. A prepayment penalty is usually optional where state law allows it, and choosing one typically earns better pricing.

How it compares to other options

The main difference is what the lender uses to decide whether the loan is affordable.

How investment property loan types compare
Loan typeHow you qualifyOften a fit for
Conventional investment loanPersonal income, debts, credit, and reservesInvestors with strong documented income and a few properties
DSCR loanThe property's rent compared with its housing paymentInvestors whose tax returns do not show their full capacity
Second home loanPersonal income, like a primary homeA vacation home you use yourself and do not treat as a rental
Bank statement loanDeposits shown on bank statementsSelf-employed borrowers, including for investment purchases

Three things to know before you apply

1

Investment loans cost more

Expect a larger down payment and a higher rate than on a home you live in. DSCR loans usually cost more than conventional ones.

2

Occupancy has to be stated truthfully

Calling a rental a primary or second home to get better terms is mortgage fraud. I will help you structure it correctly.

3

DSCR prepayment penalties are a choice

A prepayment penalty typically earns better pricing. If you may sell or refinance within a few years, we can shorten it or go without one.

Guidelines change. I confirm current requirements with the lender before quoting anything.

Common questions about investment property loans

Short answers to common questions. Program rules vary by lender, so treat these as general guidance, not a loan decision.

Can I use the rent to qualify?

Yes. On a conventional loan a portion of documented or market rent can count. On a DSCR loan the rent is the main qualifying factor.

How many financed properties can I have?

Conventional guidelines cap the number. Many DSCR lenders allow more, though each lender limits how many loans it will hold for one investor.

Can I buy in an LLC?

DSCR loans commonly allow it. Conventional loans generally close in your personal name.

Can I finance a short-term rental?

Many DSCR lenders allow it, with their own rules for documenting the income.

What is the difference between a second home and an investment property?

A second home is for your own use. Occasional renting may be allowed, but that rent cannot help you qualify. An investment property is bought to produce income.

Where do you offer investment property loans?

I am licensed in Arizona, Pennsylvania, Florida, and Texas, and I compare investor pricing across multiple wholesale lenders.

Ready to talk it through?

Pick a time that works for you. We'll go over your goals and next steps, no pressure, just a conversation. Prefer to call or text instead? Reach me directly at (412) 638-4982, or book a quick Zoom if that's easier.