Best Investment Property Loans

Formed as a brick-and-mortar lender in 1985, then moving online between 1999 and 2001 as Rocket Loans, Quicken Loans’ rise paralleled the growth of the internet. Rocket Mortgage acts as the online platform and loan processor for Quicken Loans and is the first lender to offer eClosings in all 50 states. About 98% of its mortgages use Rocket technology which provides a fully automated and fast process.

Quicken Loans lends on residential and multi-unit investment properties with fixed- and adjustable-rate home loans, mortgage refinancing, FHA, USDA, and VA loans, and jumbo loans for higher-priced homes.

On conventional loans, Quicken offers down payments as low as 3%. However, if your down payment is less than 20% you'll have to pay private mortgage insurance. A 30-year fixed loan carries a rate of 6.75% and an APR of 7.043%. Its 15-year fixed loan product rate is 6.25%, with an APR of 6.763%.

Keep in mind, you can get up to only 10 conventional mortgages that offer these rates and down payment options as stipulated by Fannie Mae guidelines. After you hit that ceiling, you’ll need to turn to alternate financing such as private equity and private or hard money lenders. The loan minimum depends on the property type, but the loan maximum is up to $2.5 million for Quicken's jumbo loan program.

Founded in 2002, Veterans United is a full-service lender that specializes in VA loans for qualifying veterans, active service members, and their spouses. They are one of the largest VA mortgage lenders in terms of volume in the United States.

Investors benefit from flexible qualification guidelines, lower rates, and monthly payments, no down payments, and no private mortgage insurance. Veterans United has VA loans for as little as 0% down, and they understand how to make the VA loan work for an investor and still remain within the program’s guidelines.

In order for a VA loan to be used on an investment property purchase, it must be a multifamily property no larger than four units, and the investor must live in one of the units. This is a key point, and if you don’t meet this criterion, the VA loan cannot be used for an investment property. If you do follow this rule, however, you will enjoy the low down payment and low rate benefits this government program provides.

Among the products offered are fixed and adjustable-rate mortgages, jumbo loans, refinance loans, and cash-out loans. Loan rates range from 5.5% to 6.625% with APRs between 5.963% and 6.806% depending on the loan product.

Veterans United does not have a minimum loan amount declared. If the investor is using a VA loan, the VA only guarantees up to the county-specific loan limit. For most counties, the limit is $726,200, but for some high-cost areas, the limit reaches $1,089,300 for loans financing one unit.

Veterans United underwrites your loan by analyzing your credit score, debt-to-income ratio, cash reserves, and income, and they review the property inspection reports, appraisal, and title search results. Plan on 40 to 50 days to close from start to finish. Much of the initial pre-approval stage is completed online.

In order for you to use a VA loan for your investment property, some of the documents you will be asked to provide are a copy of your driver’s license or other government identification, a copy of your DD-214 or Reserve/Guard points statements, a statement of service for active duty borrowers, recent pay stubs and W-2s for the last two years, recent bank statements, and disability award letters.

Lendio is a free online service for investors where users receive potential commercial loan offers within minutes from the company's marketplace of more than 75 lenders. Over 300,000 loans have been funded through Lendio, giving it a good reputation for success.

A marketplace like Lendio is great for commercial property investors because they can quickly and efficiently shop for the best terms. Unlike other commercial property options, they make the process simple with one application to shop rates.

Lendio lenders underwrite residential, multi-unit, and commercial real estate loans, as well as an array of business loans too. Down payments can be as low as 3.5% if you qualify for one of the agency loans, like FHA. Otherwise, traditional commercial property loan programs require 25% to 30% down.

Interest rates start at 4.5% on the Lendio platform for commercial property loans. Terms range from 20 to 25 years and take a minimum of 45 days to fund. Commercial property loan amounts range from $250,000 to $5 million.

Lendio suggests you already have the purchase contract, property blueprints, market analysis for the property, project budget and scope of work, and assessment of the property’s existing conditions for an efficient underwriting experience. The online application takes about 15 minutes and is where it all starts, and documents are shared electronically once you have selected a lender.

Founded in New York in 1812, Citibank provides a suite of tools that investors can use for different strategies to finance their single-family home income properties. The bank has mortgages with term lengths from 10 to 30 years. Both fixed-rate mortgages and ARMs are available. Citibank earned our best for single-family homes ranking because of its breadth of loan terms and its consistently low rates.

Their conventional loans lend up to $726,200 in most of the country and up to $1,089,300 in some high-cost areas. Above those prices, Citibank can meet your needs with a jumbo loan. Jumbo loans require higher credit scores but allow borrowers to access larger loans often with higher Loan-to-Value ratios (LTV) if desired. Conventional mortgages have lower credit score requirements than a jumbo, and Citi states you can get a conventional mortgage with a score as low as 620.

Citibank finances residential, multi-unit, and commercial properties for investors who have exceeded the limits on regular mortgages.

Existing Citibank customers benefit from closing cost credits and rate discounts, but they must set up automatic monthly mortgage payments from their Citibank deposit account. Interest rates are 5.25% and 6.25%, with APRs at 5.595% and 6.451% for 15 and 30-year fixed-rate mortgages respectively.

You can qualify for these rates and mortgages as long as you have not exceeded 10 mortgages, the limit set by Fannie Mae. For your 11th investment property purchase, you could consider wrapping your properties into a single blanket loan, where you make one payment applied to the debt on all ten properties combined. Then you would again become eligible for another conventional mortgage which will have lower interest than other options. If you do not consolidate the mortgages, you’ll have to turn to other options such as investor loans, private lenders, or hard money lenders. Generally, these choices have higher interest and often carry prepayment penalties.

The underwriting process should take 30 to 60 days. However, Citi doesn't advertise the timeframe. You may start a Citibank mortgage application over the phone, online, or, in some locations, in person. If you start online, you can be connected with a loan officer for pre-approval.

Nationwide Home Loans Group is a division of Magnolia Bank, an independent community bank founded in Kentucky in 1919. The bank has grown its services to lend nationwide.

We rated its ground-up construction loan best because it has a combination of features that no other lender has been able to put together into one program for a single-family residential investment. An investor can buy the land, build the house, and finance the mortgage all with one closing process. During the construction period, investors enjoy enhanced liquidity because they don’t have to make any payments until the home is finished.

If you want to obtain this loan via FHA or VA programs the maximum loan in most counties is $726,200. For everyone, up to $144,000 in land value may be included in your maximum loan amount. Interest rates fluctuate based on the market. Since this is a special product, expect it to be a bit more expensive than a traditional mortgage for a pre-built home. No mortgage payments are collected until the construction is complete.

The lender requires the borrower’s credit score to be at least 640 for this product. You’ll make initial contact online, but the rest of the process is done through email and phone as you exchange documents with your loan processor. 

In addition to providing a personal financial statement, you’ll need to submit building plans and information about your builder’s credentials. Your loan officer will walk you through exactly what they need depending on the specific details of your project.

Down payments vary depending on the particular loan program. For example, their VA construction loan can be as low as 0% down, and their FHA loan can be as low as 3.5% down. This loan does offer a rate lock while you shop. At the end of your construction period your loan automatically converts to a long-term mortgage without requiring a second closing.

In 2014, Bill Green and Matthew Neisser founded LendingOne in response to their frustrations felt toward the difficult lending environment from rigid bank criteria and the easier, though more expensive, hard money alternatives.

As a direct private real estate lender, LendingOne has become the best rehab lender in the industry because they help investors get what had been missing in the market, such as pre-approval letters and proof of funds, higher leverage, and lower rates and fees.

LendingOne offers fix-and-flip and rehab-to-rent loan products. Down payments range from 10% to 20%. For rehab to rent, it has a 30-year fixed-rate loan as well as 5/1 and 7/1 ARM loans. Their fix-and-flip loans can finance up to 90% of your repair costs. Two years of interest-only payments are an option on the fix-and-flip loans too. LendingOne loans on two- to four-unit properties only, including condos and townhouses.

The loan minimum is $75,000. Interest rates and loan terms are underwritten based on your experience, income, credit, and LTV. Their fees are transparent, too. Fees and closing costs apply but are not on the loan product page. It generally requires a credit score of 680, but there may be some variation depending on the product and situation.

Additional underwriting requirements are for the investor to have six months of cash reserves, a recent bank statement, a list of properties you already own, a certification that you are buying the property for business or investment purposes, the operating agreement for your business entity, driver’s license, purchase and sale contract, and a lease agreement if the property already has a tenant in place.

LendingOne can fund rehab loans in as little as 10 days, and you can apply online or over the phone.