Investment Property Loans 2026: Which Loan You Can Actually Get

Seven doors into a rental property loan, and how many investors walked through each in 2025

Most pages about investment property loans list loan types with a sentence each. The federal loan-level record lets us count them. Every lender above the HMDA reporting threshold files each application it decides, with the loan type, the occupancy (“investment property” is code 3), whether the loan was made for a business purpose, the term, the rate, the combined loan-to-value ratio (CLTV) and, if it said no, the reason. We streamed the nationwide 2025 file of originated and denied applications (8,942,981 rows), kept the investment-property and two-to-four-unit rows and sorted them with a saved script. HMDA has no field called DSCR, hard money or portfolio loan, so the groups below are our definitions built from fields that exist; they match the ones on our investment property mortgage rates page, which covers the price side in detail.

Investment-property loans by route, one to four units, 2025

Three things stand out. First, the loan most people picture, a conventional mortgage underwritten on your pay stubs and tax returns, is less than a fifth of investor lending; business-purpose loans of one kind or another are well over half. Second, the denial line is not what you might expect: the loans that skip the income check (DSCR-type) are denied more often than conventional loans, not less, because they turn on the property and the borrower's credit instead. Third, the 54,765 small-bank loans are invisible on most comparison sites, and they are the closest thing in the data to a portfolio loan from a local lender.

What the denial share means: it is denied applications divided by originated plus denied. HMDA also records withdrawn, incomplete and approved-but-not-accepted applications, which we did not download, so this is a share of decided applications, not the full federal denial rate.

Which loan you can get: five questions decide it

Before rates, the loan you qualify for depends on a few facts about you and the property. This is the decision table we would use, built from the rules quoted further down and from what the 2025 loans looked like.

Which investment property loan fits, by situation

The order matters. If you can live in the property for a year, the owner-occupied door is cheaper and needs less cash than anything an investor loan offers. If you cannot, the conventional loan is the cheapest investor loan, but it is the one that looks hardest at your income; our DSCR versus conventional comparison works through that choice with examples, so we do not repeat it here.

Living in one unit: the only way FHA and VA reach a rental

The single biggest lever for a first rental is occupancy. Federal programs lend on homes, not on investments. HUD Handbook 4000.1 defines an investment property as one “not occupied by the Borrower as a Principal or Secondary Residence” and says such properties “are not eligible for FHA insurance”. The VA program works the same way: under 38 U.S.C. 3704(c) the veteran must certify that he or she intends to occupy the property as a home, and VA's regulation defines a home as a property whose primary use is “occupancy as a home, consisting of not more than four family units” (38 CFR 36.4301).

The door that stays open is a two-to-four-unit building where you live in one unit and rent the others. FHA's rule is that “At least one Borrower must occupy the Property within 60 Days of signing the security instrument and intend to continue occupancy for at least one year”. On three- and four-unit buildings FHA adds a self-sufficiency test: the payment (PITI) divided by the net rental income “may not exceed 100 percent for three- to four-unit Properties”, with the rent from all units, including yours, reduced by the appraiser's vacancy estimate or 25%, whichever is greater. Our pages on FHA loans for investment property and VA loans for investment property go through those rules line by line.

Buying a two-to-four-unit building: living in it versus renting all of it, 2025 purchases

The gap is mostly cash, not rate. On a $400,000 duplex, FHA's 96.5% maximum means a $14,000 down payment, conventional owner-occupied at 95% means $20,000, and a conventional investor at Fannie Mae's 75% cap needs $100,000 (our arithmetic, before closing costs). The rate difference between the owner-occupied conventional loan and the investor loan on the same kind of building was 0.375 points at the median (6.75% against 7.125%, our arithmetic). VA borrowers also owe a funding fee, which VA sets at 2.15% of the loan on a first use with less than 5% down and 3.3% after first use, unless exempt.

What about FHA and VA loans reported as investment property? There were 1,903 FHA and 1,703 VA loans with occupancy code 3 in 2025. Most VA ones were refinances (1,119): VA's handbook allows an interest rate reduction refinance on a home you have moved out of, because for these loans “the veteran or the spouse of an active servicemember must certify that he or she previously occupied the property as his or her home”. The FHA ones were mostly purchases (1,659) at a median CLTV of 97.5%, and five lenders made 65.0% of them. HUD's handbook makes exceptions for HUD-approved nonprofit borrowers, government agencies and its own REO sales program; HMDA does not say which exception, if any, applies, so we do not read these as a route open to an individual investor.

Conventional investor loans: the Fannie Mae numbers that set your down payment

A conventional investment-property loan is priced and sized by the agency rules even when the lender keeps it. Fannie Mae's Eligibility Matrix (dated August 5, 2026) lists, for an investment property: purchase “1 Unit FRM/ARM: 85%” and “2-4 Units FRM/ARM: 75%”, limited cash-out refinance 75% on one to four units, and cash-out refinance 75% on one unit and 70% on two to four. For a principal residence of two to four units the purchase maximum is 95%.

Two other rules end more investors' conventional road than the down payment does. The Selling Guide caps the number of financed properties for a second home or investment property loan at 10 in Desktop Underwriter (B2-2-03), counting every one-to-four-unit property on which you are personally obligated. And the reserves grow with the portfolio: six months of payments on the subject investment property, plus 2% of the unpaid balances on your other financed properties if you have one to four, 4% at five to six and 6% at seven to ten (B3-4.1-01). Our conventional loan for investment property page has the full rule set.

The 2025 loans sit inside those caps. Only 2.7% of conventional consumer-purpose investor loans had a CLTV above 80%, and on two-to-four-unit investor purchases 1.1% did. The median loan was $245,000 and the median total loan costs $5,644, or 2.49% of the loan. 7.2% of these loans carried a prepayment penalty term, a field lenders report only on consumer-purpose loans. Fannie Mae and Freddie Mac bought 30.4% of them within 2025, and lenders had not sold 26.3% by year-end (our arithmetic for the sum).

DSCR and other business-purpose loans: no income check, more denials for collateral

When the loan is made primarily for a business purpose, the lender can underwrite the property instead of you. In the 2025 data, 152,049 business-purpose loans of 30 years or more were made without any debt-to-income ratio: the DSCR-type loan. Their median note rate was 7.375%, the middle half between 6.875% and 7.75%, the median CLTV 73.6%, and 10.4% were interest-only. None went to Fannie Mae or Freddie Mac; private securitizers bought 22.4% within the year. Another 109,087 business-purpose 30-year loans did report an income ratio (median 6.999%), many of them agency loans: Freddie Mac bought 21.7% and Fannie Mae 15.7%.

The denial figures are the surprise. DSCR-type applications were denied 23.3% of the time against 20.1% for conventional consumer-purpose loans, and the leading reason was collateral (26.1% of denials), then “other” (18.0%) and credit history (16.1%). With income out of the decision, the appraisal and the rent carry it. Lenders publish their own floors: Kiavi's site, read October 10, 2026, says its rental loans go to “Up to 80% loan-to-value (LTV)” with a “DSCR minimum: As low as 0.8x” and that it “generally requires a minimum FICO score of 660” for direct borrowers; Lima One says a property “must have at least a 1.0 DSCR ratio”. Those are the lenders' claims, not audited terms.

Read the prepayment terms. HMDA cannot show them on business-purpose loans: under the official Regulation C commentary, lenders need not report a prepayment penalty term for loans “made primarily for business or commercial purposes”. Kiavi describes its own as “Flexible options with varying term lengths and step-downs”. Our DSCR loan guide explains the ratio, and the DSCR loan in an LLC page covers title, guaranties and entity rules; run the numbers in the DSCR loan calculator before you apply.

Flip and bridge loans: 12 months, interest-only, with a balloon

Short-term business-purpose loans, 36 months or less, are the hard money and fix-and-flip market. There were 70,013 in 2025, $34.5 billion, at a median note rate of 9.99% (middle half 8.75% to 10.95%). The median term was 12 months, 87.7% were interest-only and 91.5% ended in a balloon payment. The median CLTV was 70%, but lenders in this market size the loan on purchase plus rehab cost and on after-repair value, which HMDA does not show.

This is the most concentrated door. The five largest lenders made 47.0% of short-term loans: Kiavi Funding (19,477, 27.8%), Loan Funder LLC (4,835), RF Renovo Management Company (3,691), Emporium TPO (2,490) and Easy Street Capital (2,409). On purchases alone, Kiavi made 35.2%. Kiavi's site claims fix-and-flip rates “As low as 7.75%”, “Up to 100% loan-to-cost (LTC) and up to 80% of after-repair value (ARV)*” and terms of 12, 18 and 24 months; it also says it lends on “Non-owner-occupied properties only”. Points and origination fees, the other half of the price, are not reported in HMDA for business-purpose loans, so ask for them in writing. Our hard money lenders page compares lenders nationally, and the state pages for Texas and New York cover local usury, licensing and recording rules.

Bank and credit union portfolio loans: 54,765 loans from 1,807 lenders

Banks and credit unions that originated fewer than 500 closed-end mortgage loans in each of the two preceding years can use a partial exemption from HMDA (12 CFR 1003.3(d)) and leave many fields blank, including rate, term and the business-purpose flag. That makes them easy to miss, but the count and the loan buyer are still reported. In 2025, 54,765 first-lien conventional investment-property loans came from lenders reporting the business-purpose field as exempt, totaling $14.3 billion, with a median loan of $155,000. 96.4% were not sold during 2025: the lender kept them on its own books, which is what a portfolio loan is. Only 3.7% of decided applications were denied, the lowest of any route.

No lender dominates: the largest, Bank of Bird in Hand, made 316, and the five largest together 2.3%. The data cannot show their terms, and the few loans with a reported rate or term are too small a sample to use, so treat this route as a phone call to a local bank, not a rate sheet: ask for the term, whether the rate is fixed or adjustable, any balloon date and any prepayment penalty in the commitment letter.

Borrowing against a rental you already own

Cash-out refinances were 107,640 of the 581,779 investor loans in 2025. The agency rules for them are strict on time: Fannie Mae requires that at least one borrower “must have been on title for at least for six months” before the new loan and that an existing first mortgage being paid off be “at least 12 months old”. DSCR lenders are faster on paper; Kiavi says cash-out is “Available after a property is owned for 90 days or is free and clear”.

Cash-out refinances on investment property, by route, 2025

DSCR-type loans did most of the cash-out lending to investors, three times the conventional count. A HELOC is the other way to pull equity, and it is the hardest door in the data: 26,265 lines were opened on investment property and 27,502 applications were denied, 51.2% of decided applications, with the debt-to-income ratio the top reason (40.3%). Closed-end second mortgages were not much easier (41.8% denied). Our pages on cash-out refinancing an investment property and the HELOC on investment property have the lender lists and the CLTV caps.

Why investor loan applications are denied, by loan type

Principal denial reason, share of denied applications, 2025

The pattern is consistent: where the lender reads your income, income is what fails; where it does not, the property is what fails. A borrower turned down for a conventional loan on the ratio is the profile DSCR lenders exist for; a borrower turned down on value will usually be turned down again elsewhere unless the price or the appraisal changes.

What a borrower can do with this

1. Start with occupancy. If you can live in a two-to-four-unit building for a year, price FHA, VA (if eligible) and conventional owner-occupied loans before any investor loan. The 2025 medians were 96.5% and 100% CLTV against 75% for an investor.
2. Count your financed properties and reserves before applying conventionally: 10 is Fannie Mae's cap, and reserves rise to 6% of the other balances at seven to ten properties.
3. If your tax returns understate your income, go to a DSCR lender with the rent roll, not the returns, and expect the appraisal and rent schedule to decide. Ask for the prepayment schedule and whether a personal guaranty is required; HMDA cannot show either.
4. For a flip, compare total cost, not the rate: points, draw fees, extension fees and the balloon date. The median term was 12 months.
5. For equity in a rental you own, try a cash-out refinance before a HELOC; HELOCs on rentals were denied more often than approved in 2025.

Kiavi appears above for the two routes where it lends, DSCR rental loans and short-term flip, bridge and construction loans; it does not make owner-occupied, FHA or VA loans. For a house-hack purchase, talk to an FHA, VA or conventional lender instead.

FAQ

Loan-level data: FFIEC/CFPB HMDA Data Browser, nationwide 2025 file of originated and denied applications (actions 1 and 3; 8,942,981 rows), streamed on October 10, 2026 with our script stream_extract.py, which kept investment-property and two-to-four-unit rows (906,337), and analyzed with hub_hmda.py; both scripts, the extract and the full output are in sources/. Field definitions from the FFIEC public LAR data fields; coverage rules from 12 CFR 1003.3 and 1003.4(a)(22) and the official interpretations; lender names from the FFIEC 2025 filer list. Rules from the Fannie Mae Eligibility Matrix (August 5, 2026) and Selling Guide B2-2-03, B3-4.1-01 and B2-1.3-03; HUD Handbook 4000.1 (last revised August 12, 2026); 38 U.S.C. 3704, 38 CFR 36.4301, the VA Lenders Handbook (M26-7) and VA's funding fee page (updated October 5, 2026); lender terms from Kiavi's and Lima One's websites, read October 10, 2026, as those lenders' claims. All counts, shares, medians and down payment figures are our arithmetic. This is analysis of public documents, not investment, legal, tax or lending advice.