Investment Home Loans For Real Estate Investors

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Investment properties continue to be one of the best wealth-building tools in 2025. Whether you’re looking to buy your first rental, buy, upgrade, and sell for profit, or build a long-term real estate portfolio, securing the right investment home loans is key to making it happen. In today’s market shaped by inflation, rising rents, and evolving lending guidelines, real estate investors have more flexible loan options than ever. But choosing the best one can make or break your deal. Let’s dive into the latest loan programs, qualification tips, and 2025 market trends for investment home loans.

What Are Investment Home Loans?

Investment home loans purchases a property you don’t intend to occupy. These kind of loans are designed for real estate investors who plan to rent out single-family or multifamily homes, fix and flip properties for profit, hold long-term assets for appreciation, and diversify income streams. Financing an investment property comes with higher interest rates and a larger down payments. It also has firmer underwriting and rental income qualification requirements.

Investment Home Loans Options in 2025

• Conventional Investment Property Loans (Fannie Mae & Freddie Mac) – Conventional loans are still commonly used in 2025 and work well for rental properties if you meet the usual guidelines. Key requirements are 15%–25% down payment (based on property type), 620+ credit score (but 740+ gets better rates), proof of income, employment, and reserves, and rental income allowed for qualifying (75% of market rent). It is best for long-term investors who want to finance single-family rentals or 2–4 unit homes.
• DSCR Loans (Debt Service Coverage Ratio) – DSCR loans are non-QM investment loans that don’t evaluate personal income. In 2025, they will be a favorite for self-employed borrowers and LLCs. In 2025, more lenders accept DSCR ratios below 1.0 with compensating factors like high credit or large reserves. No tax returns or W-2s required. Approval based on rental income vs. mortgage payment. Works well for LLC purchases. There’s a 20%–30% down. See the below DSCR formula.
  Gross Rent ÷ PITIA (Principal, Interest, Taxes, Insurance, and HOA)
  A DSCR of 1.0 or higher means the property covers its own expenses.
• Fix and Flip Loans – Short-term financing is created to buy, renovate, and quickly sell investment properties. In 2025, interest-only fix-and-flip loans with up to 100% rehab financing are available for experienced flippers. Fix and Flip loans have 6 to 18-month terms. Up to 90% purchase and 100% rehab funding. It is based on after-repair value (ARV). No DTI or income verification is required. It is perfect match to investors flipping houses that has plan of reselling within a year.
• Bank Statement Loans – Bank statement loans are a good choice for self-employed investors whose tax returns don’t reflect actual income. In 2025, some lenders now accept 12 months of bank statements instead of 24 and allow personal or business statements. You can qualify using average monthly deposits. No W-2s or tax returns. It has a 10%–20% down (depending on credit score). Bank statement loans are available for primary, investment, or secondary homes.
• Portfolio Loans – Portfolio loans are kept by the lender rather than being sold to Fannie Mae or Freddie Mac. These loans are ideal for investors who own more than 10 properties or need flexible terms for unique or unconventional real estate. The biggest advantage? Flexibility. Portfolio loans can be tailored with custom terms. It can allow multiple properties to be financed under a single loan, and typically come with fewer restrictions on property condition.
• Blanket Home Loans – A blanket mortgage lets you finance multiple investment properties under one loan. In 2025, to maximize cash flow, blanket home loans now have interest-only options. These loans are best for real estate investors quickly expanding their portfolio.
• Commercial and Mixed-Use Loans – This is for buildings with 5+ units or a residential and business use mix. These loans are based on Net Operating Income (NOI). Down payments are around 25%–30%. It has a customizable loan terms (often 5, 7, or 10-year balloons).

Mortgage Rates on Second Home Versus Primary Home Loans

A second/vacation home loan mortgage rates are comparable to first home mortgage rates. A 10% down payment is required on second home loans. However, on investment home loans, Conventional mortgage rates are about 0.50% higher than first-home or second/vacation home mortgage rates.

Second Home Financing

Fannie and Freddie have strict mortgage guidelines when it comes to second home financing. Those who are interested in purchasing a second/vacation home that is nearby their primary owner-occupied home need to meet certain requirements. Although it is only a second home or vacation home, lenders will consider it as an investment home due to the closeness of the primary residence.

Difference Between Primary Versus Second Home Mortgage Loans

For it to be considered a second/vacation home, the home needs to be at least 60 miles or more from the primary residence. If it is close to the primary home, it needs to be waterfront or have some unique features to be classified as a second home. Homebuyers of second homes need to justify to the underwriter why it is a second home and not an investment property.

Full Doc Investment Property Mortgages

Homebuyers who have a higher debt-to-income ratio might not qualify for another property such as an investment home if they cannot use the potential investment home income to offset their high debt-to-income ratio. The good news is that investment homebuyers can use 75% of the potential gross monthly rental income.

Frequently Asked Questions: Investment Home Loans for Real Estate Investors

Q: What are investment home loans?

Investment home loans are used to finance a property that you don’t live in, such as a rental or fix-and-flip property.

Q: How much down payment is required for investment home loans?

Most lenders require 15% to 30% down, depending on the loan type, credit score, and property.

Q: Can I use rental income to qualify for investment home loans?

Yes, most lenders allow you to use current or projected rental income to help you qualify.

Q: What credit score do I need to get approved?

You typically need a minimum credit score of 620 for conventional loans, but 700+ is ideal for the best rates.

Q: Can I buy an investment property under an LLC?

Yes, many non-QM and DSCR lenders allow you to purchase in an LLC or business entity name.

Q: Are there loan options that don’t require tax returns?

Yes, DSCR loans and bank statement loans allow you to qualify without tax returns.

Q: What’s a DSCR loan?

A DSCR loan qualifies you based on the property’s rental income instead of your personal income.

Q: How many investment properties can I finance?

Fannie Mae allows up to 10 financed properties, but portfolio and blanket loans can help you finance even more.

Q: Do investment home loans have higher interest rates?

Yes, rates are usually 0.5% to 1.5% higher than owner-occupied loans due to increased risk.

Q: How quickly can I close investment home loans?

Some loans, like DSCR and hard money, can close in as little as 7 to 14 days. Conventional loans may take 30+ days.

Qualifying For No-Doc Investment Home Loans

Gustan Cho Associates are experts in no-doc investment loan programs:

• No doc investment loan program is where income tax verification is not required
• The loan is solely underwritten based on the cash flow of the subject property
• The no-doc investment loan program is underwritten based on the debt coverage ratio
• The borrower’s credit scores matter but are not based on the individual debt-to-income ratio
• Unlike Fannie Mae’s 5 to 10 Financed Properties Guidelines, there is no maximum amount of financed property requirements
• No Doc Investment Property Loans, the property is underwritten
• No Doc Investment Property Loans can be financed directly to an LLC or borrower

Ready to Finance Your Investment Property?

We work with real estate investors nationwide and offer fast closings, low documentation options, and investor-friendly terms. Whether you’re buying your first property or your fiftieth, let’s make your next investment deal your most profitable one yet. If you have questions on investment home loans or no-doc investment property loans, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at alex@gustancho.com.  You can also subscribe to our daily mortgage and real estate newsletter at Gustan Cho Associates. Contact us today to get pre-approved for an investment home loan in 2025!