Investment Property Loan

An investment property loan funds a property you buy to earn income rather than to live in. It carries a higher down payment and a higher rate than a loan on your primary residence, because lenders see income property as more likely to be walked away from in a downturn.

Down payments commonly start around 15 percent (Fannie Mae allows up to 85 percent loan-to-value), though in practice 20 to 25 percent down is typical and the exact requirement varies by lender. Documented rental income may help you qualify, but lenders usually count it at a discount rather than at face value, so do not assume the full projected rent will support the loan.