Finding the Best Lenders for Investment Property Loans in 2025

Buying an investment property in 2025? That’s awesome. But before you get too far, let’s talk about the money side of things. Finding the right lenders for investment property loans can feel like a puzzle, especially with all the options out there. Whether you’re looking at traditional loans, something a bit more specialized, or even newer ways to fund your deal, knowing where to look and what to expect is key. This guide breaks down the different types of loans and where you might find them, helping you make a smarter choice for your next rental property.

Key Takeaways

• Conventional mortgage loans are a common starting point, but many other loan types exist for investors.
• Specialized lenders like hard money, private money, and DSCR lenders offer flexible options for investment properties.
• Banks, credit unions, and online lenders all provide different avenues for securing investment property loans.
• Brokers can help compare options, but direct lenders often offer more straightforward processes.
• Carefully analyzing your financial situation and the property’s potential is crucial when choosing from available lenders for investment property.

1. Conventional Mortgage Loans

Conventional mortgage loans are a popular choice for real estate investors because they aren’t backed by the government. This means they generally follow standard lending practices and can be quite flexible. You’ll find these loans offered by a wide range of financial institutions, from large national banks to smaller credit unions.

These loans are a solid option for investors with good credit and a stable financial history. They typically come with fixed interest rates, which can be appealing for budgeting purposes, though adjustable-rate mortgages (ARMs) are also available. The repayment terms usually span 15, 20, or 30 years, with the 30-year term being the most common. This longer repayment period generally results in lower monthly payments, making the investment property more manageable from a cash flow perspective.

When considering a conventional loan for an investment property, keep these points in mind:

• Down Payment: While some conventional loans might allow for a down payment as low as 3% for primary residences, investment properties often require a larger down payment, typically 20% or more, to avoid Private Mortgage Insurance (PMI).
• Credit Score: Lenders usually look for a credit score of at least 620, but a higher score will get you better interest rates and terms.
• Loan Limits: Conventional loans must adhere to conforming loan limits set by the Federal Housing Finance Agency (FHFA). Loans exceeding these limits are considered nonconforming or jumbo loans and may have different requirements.

It’s worth noting that while conventional loans offer a straightforward path to financing, they do come with certain requirements. If you’re looking to purchase a property that needs customization, exploring new build homes might be a good parallel consideration.

The application process for a conventional mortgage involves submitting detailed financial information. Lenders will scrutinize your income, existing debts, and credit history to determine your eligibility and the specific loan terms you’ll receive. This thorough review helps ensure the loan is a responsible choice for both the borrower and the lender.

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2. FHA Loans

When you’re looking into financing for a property, you might come across FHA loans. These are mortgages insured by the Federal Housing Administration, which is part of the U.S. Department of Housing and Urban Development. The big draw for many people is that FHA loans often have more flexible qualification requirements compared to traditional loans. This can include lower credit score minimums and a smaller down payment.

However, there’s a significant catch when it comes to using FHA loans for investment properties. FHA loans are primarily intended for primary residences. This means you generally can’t use them to buy a property that you don’t plan to live in. So, if your goal is to purchase a rental property outright or a property for purely investment purposes, an FHA loan typically won’t be an option.

There is a way some investors use FHA loans for investment, though: house hacking. This strategy involves buying a multi-unit property (like a duplex, triplex, or fourplex), living in one unit, and renting out the others. Because you’ll be occupying one of the units, it meets the primary residence requirement for an FHA loan. This can be a great way to get into real estate investing with a lower down payment, often as little as 3.5%.

Here’s a quick look at some general FHA loan characteristics:

• Lower Down Payment: Often requires as little as 3.5% down.
• More Lenient Credit Requirements: May be accessible to borrowers with lower credit scores.
• Primary Residence Focus: Generally restricted to owner-occupied properties.
• Mortgage Insurance: Requires both an upfront and annual Mortgage Insurance Premium (MIP), which adds to the overall cost.

It’s important to remember that loan limits apply to FHA loans, and these can vary by location. For 2025, these limits are set, and in many areas, they might not be high enough for more expensive markets, potentially limiting your choices for larger investment properties.

While FHA loans offer a pathway for some to enter homeownership with less upfront capital, their strict owner-occupancy rule makes them unsuitable for most pure investment property purchases. House hacking remains the primary exception for investors looking to utilize FHA financing.

3. VA Loans

VA loans, backed by the U.S. Department of Veterans Affairs, are a fantastic benefit for eligible veterans, active-duty service members, and surviving spouses. While primarily designed for primary residences, they can be a clever entry point into real estate investing through the “house hacking” strategy. This means you can buy a multi-unit property (up to four units) and live in one of them while renting out the others.

One of the biggest draws of VA loans is the potential for no down payment. This can significantly lower the barrier to entry for investors who might not have a large sum saved up. Additionally, these loans often come with competitive interest rates and no Private Mortgage Insurance (PMI), which can lead to lower monthly payments compared to conventional loans.

Here are some key features of VA loans for potential investors:

• No Down Payment Requirement: The VA doesn’t mandate a down payment, making homeownership more accessible.
• Competitive Interest Rates: VA loan rates are typically lower than those for conventional mortgages.
• No PMI: You avoid the extra monthly cost of Private Mortgage Insurance.
• Limited Closing Costs: Closing costs are generally lower than with other loan types.
• Reusable Benefit: The VA loan benefit can be used multiple times throughout your life.

However, it’s important to note that lenders might still impose their own credit score requirements, often around 620, and some may have down payment expectations even though the VA itself doesn’t require one. Also, the primary residence requirement means you’ll need to live in one of the units if you’re purchasing a multi-family property for investment.

While VA loans are a powerful tool for veterans looking to invest, understanding the specific lender requirements and the primary residence stipulation is key to successfully using this benefit for real estate investment.

For those looking to explore VA loans for investment properties, Veterans United is a prominent lender that specializes in these types of loans. They are known for their deep understanding of VA loan intricacies and can help borrowers navigate the process, especially when it comes to the nuances of using the benefit for multi-unit properties where the borrower will reside.

4. Hard Money Loans

Hard money loans are a financing option specifically for real estate investors, distinct from traditional mortgages. These loans come from private individuals or companies, not standard banks. The primary collateral for a hard money loan is the investment property itself. This asset-based approach allows lenders to be more flexible with terms and structures compared to conventional loans.

These loans are often sought after for their speed and accessibility, especially for projects that require quick funding. Think of situations like flipping a property or acquiring an investment quickly before a better opportunity slips away. Because they are asset-based, the lender focuses more on the property’s value and potential return rather than solely on the borrower’s credit score or financial history. This can be a lifesaver if your credit isn’t perfect or if you need funds faster than a bank can provide.

Here’s a quick look at what makes them stand out:

• Speedy Funding: Hard money loans can often be approved and funded in a matter of days, sometimes even a week or two. This is a huge advantage when time is of the essence in a real estate deal.
• Flexible Qualification: Approval hinges more on the property’s value and your investment plan than on a lengthy credit check. This opens doors for investors who might not qualify for traditional loans.
• Shorter Terms: Repayment periods are typically much shorter, often ranging from six months to a few years. This means you can pay off the loan relatively quickly and move on to your next investment.

However, this flexibility comes at a cost. The interest rates on hard money loans are generally higher than conventional mortgages, often in the 8% to 15% range. Additionally, lenders might require a larger down payment, sometimes between 10% and 35% of the property’s value, because they often lend a lower percentage of the property’s worth (Loan-to-Value ratio). The short repayment period also means you need a solid plan to pay back the loan quickly, usually through selling the property or refinancing.

The key to using hard money loans successfully lies in having a clear exit strategy. Whether it’s a quick flip or a short-term rental strategy, knowing exactly how you’ll repay the loan before you take it out is paramount to avoiding significant financial risk.

5. Private Money Loans

Private money loans come from individuals or private companies, not traditional banks. Think of them as loans from people you might know, like friends, family, or other investors who have capital to lend. These loans are often seen as a flexible option for real estate investors because the terms aren’t set in stone by a large institution. Instead, they’re worked out directly between you and the lender.

One of the biggest draws of private money loans is their flexibility. The requirements can be quite different from one lender to another, and they often focus more on the deal itself and your ability to make it work, rather than just your credit score. This can be a real advantage if you have a less-than-perfect credit history or if you’re looking for a loan that moves faster than a conventional mortgage.

Here’s a quick look at what makes them stand out:

• Flexible Terms: You can often negotiate the specifics of the loan, including repayment schedules and interest rates, directly with the lender.
• Asset-Based Qualification: Lenders might look more at the investment property itself and its potential than solely on your personal financial history.
• Speedy Approval: Because there are fewer layers of approval, these loans can often be secured much faster than traditional bank loans, which is great for competitive markets.

However, this flexibility comes with its own set of considerations. Private money loans often come with higher interest rates and shorter repayment periods compared to conventional mortgages. The down payment might also be larger. It’s not uncommon for interest rates to range significantly, sometimes from 7% up to 36%, and loan terms might be as short as 12 months, though longer terms can sometimes be negotiated. This means you need to be very confident in the investment’s ability to generate income quickly to cover the loan payments. The risk of losing the property if you can’t repay is also a significant factor, as the property often serves as collateral. It’s important to do your homework on the lender, as they are not regulated in the same way as banks. Understanding the potential impact of rising insurance premiums on your investment’s profitability is also key when considering any loan due to inflation.

Private money loans can be a powerful tool for investors who understand the risks and have a solid plan for a quick return on investment. They offer a path to financing when traditional options might not be available or timely enough.

6. HELOCs

A Home Equity Line of Credit, or HELOC, offers a different approach to financing investment properties by tapping into the equity you’ve already built in your primary residence. Think of it as a revolving credit line secured by your home, allowing you to borrow funds as needed up to a certain limit. This can be a flexible option, especially if you have a substantial amount of equity available.

The primary advantage of a HELOC is its flexibility and cost-effectiveness, as you only pay interest on the amount you actually draw. This means if you have a $100,000 line of credit but only use $20,000, your interest payments are calculated on that $20,000, not the full amount. This can make it a more economical choice compared to other loan types where you might pay interest on the entire loan balance from the start.

Here’s a breakdown of what makes HELOCs appealing for some investors:

• Access to Funds: You can typically draw funds over a set period, often 10 to 15 years. This draw period allows for ongoing access to capital for multiple investments or ongoing project needs.
• Repayment Flexibility: Following the draw period, there’s a repayment phase, usually lasting another 10 to 20 years. This longer repayment term can ease the monthly financial burden compared to shorter-term loans.
• Interest on Usage: You’re charged interest only on the funds you’ve withdrawn, not the entire credit line. This can lead to significant savings over the life of the loan.
• Potential Tax Benefits: In some cases, the interest paid on a HELOC used for investment purposes may be tax-deductible, offering a financial advantage.

However, HELOCs come with their own set of considerations that investors must weigh carefully:

• Home as Collateral: The most significant risk is that your primary residence is used as collateral. If you default on the HELOC, you could lose your home.
• Variable Interest Rates: Most HELOCs have variable interest rates tied to a benchmark rate, like the prime rate. This means your monthly payments can fluctuate, making budgeting more challenging.
• Equity Requirement: You need to own a home and have built up a considerable amount of equity to qualify. Often, a HELOC can only cover a portion of the investment property’s cost, such as the down payment.
• Fees and Penalties: Be aware of potential fees, such as annual maintenance fees, and penalties for closing the line of credit early.

When considering a HELOC, it’s vital to understand that you are leveraging your personal home to finance an investment. This means the financial health of your investment property directly impacts the security of your primary residence. Thoroughly assess your risk tolerance and the projected returns of the investment before proceeding.

While HELOCs can provide a substantial amount of capital, they require a homeowner’s existing property as security. This differs from loans like hard money or private money, which typically use the investment property itself as collateral. For investors who own their primary home outright or have significant equity, a HELOC can be a powerful tool, but it demands careful financial planning and a clear understanding of the risks involved.

7. Crowdfunding

Crowdfunding has emerged as a modern way for investors to pool their money together to fund real estate projects. Think of it as a digital version of a group investment, where many people contribute smaller amounts to collectively buy or develop properties. This approach has become more accessible thanks to advancements in technology, making it an interesting option for those who might not have the capital for a full down payment or want to spread their investments across different ventures.

The core idea is simple: many small contributions add up to a significant investment.

Platforms that facilitate crowdfunding typically handle the property selection, management, and distribution of returns. This means investors can often participate passively, without needing to deal with tenants or property upkeep directly. It’s a way to get a piece of real estate, sometimes even commercial properties, without the usual hands-on responsibilities.

Here’s a look at some common aspects:

• Low Entry Point: Unlike traditional loans that require substantial down payments, crowdfunding often allows you to start investing with relatively small sums, sometimes as low as $50 to a few hundred dollars, depending on the platform.
• Diversification: The low investment threshold makes it easier to spread your money across multiple properties or projects, potentially reducing overall risk.
• Passive Income Potential: Once invested, the management is usually handled by the platform or a designated team, allowing for a more hands-off approach to earning returns.
• Access to Different Property Types: Crowdfunding can provide opportunities to invest in commercial real estate or larger developments that might otherwise be out of reach for individual investors.

However, it’s not without its considerations. Returns are typically shared among many investors, meaning your individual share might be smaller compared to owning a property outright. You also give up direct control over property management decisions. Since it’s a relatively new method, it’s wise to research platforms thoroughly and perhaps start with smaller amounts to get a feel for how it works.

Crowdfunding platforms act as intermediaries, connecting investors with real estate deals. They vet properties, manage the investment process, and distribute profits. This structure offers convenience but means investors rely on the platform’s expertise and decisions.

8. DSCR Loans

DSCR loans, which stand for Debt Service Coverage Ratio, are a specialized type of financing designed specifically for real estate investors. Unlike traditional mortgages that heavily rely on your personal income and credit history, DSCR loans focus primarily on the property’s ability to generate enough rental income to cover its own expenses, including the mortgage payment, property taxes, and insurance.

This focus on the property’s cash flow makes them a powerful tool for investors who might not fit the standard lending mold. For instance, self-employed individuals, those with fluctuating income, or investors with multiple properties might find it challenging to qualify for conventional loans. DSCR loans offer an alternative by looking at the numbers the property itself produces.

Here’s a quick look at what makes DSCR loans stand out:

• Qualification Basis: Primarily based on the property’s net operating income (NOI) relative to its debt service. A common benchmark is a DSCR of 1.20 or higher, meaning the property’s income is 20% more than its debt obligations.
• Investor-Focused: They are built with investors in mind, acknowledging that property performance is key to investment success.
• Non-QM Status: DSCR loans fall under the non-qualified mortgage category, giving lenders more flexibility in their underwriting criteria compared to traditional loans.

Key Considerations for DSCR Loans:

• Down Payment: Typically requires a larger down payment, often ranging from 20% to 30% of the property’s value.
• Interest Rates & Fees: Can come with slightly higher interest rates and fees compared to conventional loans, reflecting the different risk assessment.
• Property Income: The property must demonstrate a strong potential for rental income that can comfortably cover the loan payments. Lenders will scrutinize the projected rental income.

When considering a DSCR loan, it’s important to have a clear picture of the property’s financial performance. This means accurately estimating rental income and all associated operating expenses. Lenders want to see a solid business case for the investment, not just a personal financial statement.

These loans are particularly well-suited for investors looking to acquire properties with strong cash flow potential, whether for long-term buy-and-hold strategies or even some short-term rental scenarios, provided the income projections are robust enough to meet the DSCR requirements.

9. Bridge Loans

Bridge loans are a type of short-term financing designed to help investors cover the gap between purchasing a new investment property and securing more permanent financing. Think of it as a temporary solution, a way to keep your investment plans moving forward without missing out on a good opportunity.

These loans are typically used when you need to buy a new property before you’ve sold your current one, or when you’re in the process of renovating a property and need funds quickly before a long-term loan is approved. They offer fast funding, which is a big plus in the competitive real estate market.

Here’s a quick look at what bridge loans often entail:

• Loan Amounts: Generally range from $150,000 up to $3,000,000, depending on the lender and the property.
• Loan-to-Value (LTV): Typically up to 70% LTV, meaning you’ll need a significant down payment or existing equity.
• Term Length: Short, usually between 3 months and 24 months. This is why they’re called ‘bridge’ loans – they bridge a short period.
• Interest Rates: Can be higher than traditional mortgages, often starting around 10.99% or more.
• Credit Score: A minimum credit score of around 660 is usually required.
• Property Types: Can be used for single-family homes, 2-4 unit properties, and even commercial or multifamily buildings.

The main advantage of a bridge loan is its speed and flexibility, allowing investors to act quickly on deals.

Bridge loans are not meant for long-term ownership. They are a strategic tool to facilitate a transaction, providing the necessary capital for a limited time until a more stable, long-term financing solution is in place or the property is sold.

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10. Constitution Lending

Constitution Lending is a direct lender that focuses on making the loan process for investment properties as quick and reliable as possible. They were founded by investors who experienced firsthand the frustrations of slow closings and last-minute rejections from other lenders. This experience shaped their approach to lending.

One of their main selling points is speed. Constitution Lending claims to close loans within 7 to 14 days, and sometimes even faster, like four days. They achieve this through a couple of key features:

• Automated Pricer: This tool lets borrowers get multiple loan quotes instantly by inputting property details, FICO score, and loan type. You can adjust variables like property value or loan amount to see how they affect rates and payments.
• Online Documents Portal: Once you select a quote, you can upload all necessary documents right away. This avoids the back-and-forth with a loan officer waiting for them to tell you what else is needed.

Because they are a direct lender, they use their own capital to fund loans. This means they set their own lending requirements and have the final say on approvals. They don’t have to wait for another institution to underwrite the loan, which helps prevent those stressful last-minute rejections. If there’s an issue, like a property not generating enough income, they’ll let you know after you submit documents so you can address it.

Constitution Lending aims to simplify the investment property loan process by cutting out unnecessary delays and uncertainties. Their direct lending model and technology-driven approach are designed to give investors more confidence and speed in their transactions.

They offer various loan types, including fix-and-flip loans, DSCR loans, bridge loans, and construction loans. Since starting in 2018, they’ve originated over $200 million in loans, working with both experienced investors and newcomers to the real estate scene. Their client retention rates suggest a high level of satisfaction, with a significant percentage of investors staying with them for multiple years.

11. Lima One Capital

Lima One Capital is a lender that focuses specifically on investment properties. They offer a range of loan products designed for real estate investors, whether you’re looking to buy and hold, fix and flip, or build from the ground up. They position themselves as a direct lender, meaning they handle the entire loan process in-house, which can sometimes lead to quicker decisions.

Lima One Capital provides several types of loans that might be useful for investors:

• Fix-and-Flip Loans: These are short-term loans meant to finance the purchase and renovation of a property you plan to sell quickly for a profit. They can offer high loan-to-cost (LTC) ratios, sometimes up to 92.5%, and loan amounts can range from $75,000 to $3 million.
• DSCR Loans: If you’re buying a property to rent out long-term and your personal debt-to-income ratio is a concern, a Debt Service Coverage Ratio (DSCR) loan might be an option. These loans focus more on the property’s ability to generate rental income to cover the loan payments.
• Ground-Up Construction Loans: For those looking to build new homes, Lima One Capital offers loans to finance the entire construction process.
• Bridge Loans: These are interim financing options, useful if you need to purchase a new property before your current one sells. They can be structured with up to 80% loan-to-value (LTV).

When considering Lima One Capital, it’s good to know that they cater to investors looking for financing that doesn’t always fit the mold of traditional bank loans. They work with properties intended for 1-4 units, and first-time homebuyers can also qualify for some of their loan products.

Applying with Lima One Capital typically involves filling out a contact form on their website, after which a loan officer will reach out to discuss your needs and provide a quote. Their process aims to be straightforward for investors focused on real estate ventures.

While they offer competitive terms, remember that specific requirements like cash reserves can vary depending on the loan type. It’s always a good idea to get a clear picture of all associated costs and terms before committing.

12. RCN Capital

RCN Capital is a lender that popped up in 2010, and they’ve been working with real estate investors ever since. They’re based in Connecticut but actually work in most of the U.S., just not Alaska, Nevada, North Dakota, South Dakota, or Vermont. What’s interesting about RCN is that they tend to focus more on the property itself rather than the borrower’s personal financial situation. This can be a big help if you have a higher debt-to-income ratio or don’t have a traditional W2 job.

They offer a few different loan types that are pretty standard for investors:

• Fix and Flip Loans: These are for when you want to buy a property, fix it up, and then sell it quickly for a profit.
• Long-Term Rental Loans: If you plan to buy a property and keep it as a rental for a while, these loans are designed for that.
• Multifamily Loans: These are for properties with five or more units, like apartment buildings.
• New Construction Loans: For those looking to build properties from the ground up.

When it comes to the numbers, RCN Capital has some specific requirements. You’ll generally need a FICO score of at least 660, and they can go up to 80% loan-to-value (LTV). Loan amounts can range from $50,000 up to $2 million for most properties, and for those larger multifamily buildings (5+ units), the maximum is $2.5 million. The loan terms for fix-and-flip projects are typically between 12 and 18 months.

RCN Capital’s approach of looking at the property’s potential rather than solely the borrower’s personal finances can open doors for investors who might not fit the mold of traditional lenders.

Applying with RCN Capital is pretty straightforward. You can create an account on their website, input some basic information, and then a loan officer will reach out to discuss your options and guide you through the rest of the process.

13. BridgeWell Capital

BridgeWell Capital is a lender that focuses on providing quick financing options for real estate investors. They primarily operate in the Midwest and Eastern parts of the United States, with a presence in states like Florida, Texas, and Colorado.

BridgeWell Capital offers a few key loan products designed for investors:

• Fix and Flip Loans: These loans are available for investors looking to purchase and renovate properties. You can borrow up to $2 million for these projects.
• Long-Term Rental Loans: If you’re a professional investor who might not qualify for traditional mortgages, these loans can help you buy investment properties to rent out.
• Owner-Occupied Property Loans: Interestingly, BridgeWell also provides loan options for properties that investors plan to live in as their primary residence.

When it comes to loan requirements, BridgeWell Capital typically offers Loan-to-Value (LTV) ratios ranging from 60% to 80%. A notable feature is that they often fund 100% of the necessary rehab costs, with 20% of the rehab loan disbursed upfront. They also don’t charge interest on construction funds that haven’t been drawn yet, and there are no prepayment penalties on their short-term loans. The maximum commercial loan amount they offer is $2 million, and their funding can be used for various property types, including residential, retail, and mixed-use.

BridgeWell Capital aims to simplify the financing process for investors who need funds quickly. Their focus on specific regions and loan types makes them a specialized option for certain investment strategies.

Applying with BridgeWell usually involves completing a questionnaire on their website, after which a loan officer will contact you to discuss your needs and the application process further.

14. Griffin Funding

Griffin Funding is a lender that works with real estate investors, offering a variety of loan products. They are based in San Diego and operate in 25 states plus Washington D.C. If you’re looking to fix and flip a property or buy one to rent out, they might have options for you.

They have a few different types of loans available:

• DSCR Loans: These loans look at how much rental income a property can generate to cover its own debt, rather than focusing solely on your personal income.
• Asset-Based Loans: You can use assets like savings accounts or stocks as collateral for these loans.
• Bank Statement Loans: If you’re self-employed and don’t have traditional W2 income, these loans let you use your bank statements to show your income.
• Conventional Mortgages: For investors who might want to live in a property and rent out a portion, they offer conventional loans.
• VA Loans: These are specifically for veterans and often come with no down payment requirements.
• Jumbo Loans: If you need a loan larger than what’s typically set by Fannie Mae and FHFA, they offer loans up to $20 million.

To qualify for a DSCR loan, the property generally needs to generate enough income to cover at least 75% of its debt obligations. Loan amounts can range from $100,000 up to $20 million. For short-term rentals like Airbnbs, a 60% occupancy rate is usually needed. Origination fees typically fall between 1% and 3%, and a minimum FICO score of 580 is generally required.

Griffin Funding focuses on evaluating the property’s potential rather than strictly your personal financial history, which can be helpful for investors with non-traditional income sources.

15. Large National Banks

When you think about getting a loan for an investment property, big national banks might be one of the first places that come to mind. They’ve got a lot of history and a huge presence, which can feel reassuring. These institutions often have deep pockets and a wide range of services, making them a go-to for many borrowers.

One of the main draws of working with a large national bank is their established infrastructure. This means they usually have robust online platforms for applications and account management, alongside a physical branch network. This combination can be great for people who like to handle some things digitally but also want the option to talk to someone in person.

Here’s a look at what you might expect:

• Established Processes: National banks typically have well-defined lending processes, which can lead to a predictable experience.
• Variety of Products: While they might not specialize in every niche loan, they often offer a good selection of standard mortgage products.
• Customer Service Options: You usually have multiple ways to get in touch, from phone support and online chat to visiting a local branch.
• Reputation and Stability: Their long-standing presence in the market can offer a sense of security.

However, it’s not always straightforward. Large banks can sometimes have stricter underwriting requirements. This means they might look very closely at your credit score, debt-to-income ratio, and the amount of cash reserves you have. They might also offer lower loan-to-value (LTV) ratios, meaning you’ll likely need a larger down payment compared to some other lenders.

While large national banks can be a solid choice due to their stability and resources, their loan terms and approval processes might be less flexible than those offered by specialized lenders. It’s always a good idea to compare their offers with others in the market.

For example, Bank of America, a major player, has been noted for offering competitive average interest rates on investment property loans. They also have a significant number of branches and loan officers, which can be beneficial. However, their average LTV might be lower, suggesting a preference for borrowers who can put down a larger portion of the purchase price. Other large banks like PNC and Wells Fargo also have investment property loan options, though their specific terms, rates, and requirements can vary significantly.

16. Regional Banks

Regional banks can be a solid choice for investment property loans, especially if you already have a relationship with one. They often provide a more personalized touch than the giant national institutions, and their loan officers might be more flexible when it comes to unique situations. Think of them as a middle ground – big enough to have robust lending operations, but small enough to still know their customers.

When considering a regional bank, here are a few things to keep in mind:

• Local Market Knowledge: These banks are deeply invested in their local communities. This means they often have a better grasp of local real estate trends and can be more willing to lend in specific neighborhoods they understand well.
• Relationship Banking: If you’re a long-time customer with a good history, a regional bank might offer more favorable terms or be more willing to work with you on loan requirements. Building that rapport can pay off.
• Loan Variety: While they might not have the sheer volume of loan products as national banks, many regional banks offer conventional mortgages, and some are increasingly offering specialized investment property loans, including those with flexible down payment options or for borrowers with less-than-perfect credit.
• Customer Service: Often, you’ll find that customer service at a regional bank is more accessible. You might be able to speak directly with a loan officer or branch manager who can help guide you through the process.

However, it’s not always smooth sailing. Regional banks might have:

• Slower Processes: Compared to some online lenders or even larger national banks with advanced tech, the application and approval process at a regional bank can sometimes take a bit longer.
• Geographic Limitations: As the name suggests, their reach is limited. If you’re looking to invest outside their service area, they likely won’t be an option.
• Potentially Higher Rates: While not always the case, some regional banks might not be able to compete with the lowest rates offered by national lenders who have massive economies of scale.

It’s always a good idea to compare offers from a few different regional banks, even if you have an existing relationship. Don’t be afraid to ask detailed questions about their investment property loan products, including interest rates, fees, loan-to-value ratios, and repayment terms. Getting pre-approved can also give you a clearer picture of what you can afford and strengthen your negotiating position.

17. Credit Unions

Credit unions are member-owned financial cooperatives that often provide a more personalized banking experience compared to larger institutions. When looking for investment property loans, credit unions can be a good option, especially if you’re already a member. They tend to focus on serving their members’ needs, which can sometimes translate into more flexible terms or competitive rates, though this isn’t always the case.

One of the main advantages of working with a credit union is their community focus. They often have a vested interest in the financial well-being of their members and the local economy. This can lead to a more relationship-based approach to lending, where they might be willing to consider factors beyond just your credit score and debt-to-income ratio. For investment properties, this might mean a slightly more lenient underwriting process if they know you and trust your business acumen.

However, credit unions typically have membership requirements. You’ll usually need to live in a certain area, work for a specific employer, or belong to a particular group to join. If you’re not already a member, you’ll need to see if you qualify. Also, their loan product offerings might be more limited than those of large national banks or specialized mortgage lenders. Not all credit unions will offer specific investment property loan products, so it’s worth checking their portfolio.

Here are some points to consider when exploring credit unions for your investment property loan:

• Membership Eligibility: Understand the requirements to join the credit union.
• Loan Products: Verify if they offer loans specifically for investment properties.
• Interest Rates and Fees: Compare their rates and fees against other lenders.
• Lending Area: Confirm if they lend in the geographic area where your investment property is located.

While credit unions might not always have the most aggressive rates or the widest array of loan products for investors, their member-centric approach can sometimes lead to a smoother, more supportive borrowing experience. It’s definitely worth investigating if you meet their membership criteria.

Many credit unions are part of larger networks, which can sometimes expand their reach and services. For instance, some credit unions participate in shared branching, allowing members to conduct transactions at other credit union locations. This can be a convenience factor, though it’s less directly related to the loan process itself. When you’re comparing options, remember that credit unions are a type of financial institution that plays a vital role in local economies.

18. Online Lenders

When you’re looking for investment property loans in 2025, online lenders have become a really popular choice. They often move faster than traditional banks and can be more flexible with their requirements. Think of them as the modern way to get a loan, cutting out a lot of the old-school paperwork and waiting.

One of the biggest draws of online lenders is their speed. Many can give you a quote almost instantly, and some even promise to close loans much faster than brick-and-mortar institutions. This is a huge deal in real estate investing, where opportunities can disappear quickly. They often use technology to streamline the application and underwriting process, which means less waiting around for you.

Here’s what often sets online lenders apart:

• Technology-Driven Process: From online applications to digital document submission, they’ve embraced tech to make things smoother.
• Faster Turnaround Times: Many aim for quicker pre-approvals and closings compared to traditional banks.
• Potentially More Flexible Criteria: Some online lenders focus more on the property’s potential than just your personal credit history, which can help investors who don’t fit the standard mold.
• Wider Reach: They aren’t limited by geography, so you can work with them from pretty much anywhere.

It’s important to remember that not all online lenders are the same. Some are direct lenders, meaning they use their own capital to fund loans. Others are more like brokers, connecting you with third-party lenders. Understanding this distinction is key, as direct lenders often have more control over the process and can provide more definitive answers sooner. This direct control often leads to a more predictable and reliable closing timeline.

When comparing online options, look at their loan products, interest rates, fees, and, most importantly, their track record. Reading reviews and understanding their underwriting process can give you a good sense of whether they’re a good fit for your investment goals. Exploring various borrowing options, from traditional bank loans to peer-to-peer lending, is crucial for finding the safest and most suitable method for your financial needs. Understanding the nuances of each avenue helps in making informed decisions.

Some online lenders specialize in investment properties and have developed processes specifically for investors. They understand the unique needs of real estate investors, such as the importance of cash flow and property value, and tailor their loan products accordingly. This focus can make them a more attractive option than a general lender who might not grasp the specifics of investment real estate.

19. Mortgage Brokers

When you’re looking for a loan for an investment property, you might hear about mortgage brokers. Think of them as matchmakers for borrowers and lenders. They don’t actually lend money themselves, but they work with a bunch of different lenders to find options that might fit what you need. It’s kind of like going to a travel agent instead of calling every single airline yourself.

So, how does this actually work? You tell the broker about your situation – how much you want to borrow, what kind of property it is, your financial background, and so on. They then take that information and shop it around to various lenders they have relationships with. The goal is to find a lender who offers terms that are agreeable to you.

Here’s a breakdown of what they do:

• Connect Borrowers and Lenders: Their main job is bridging the gap between people needing loans and institutions providing them.
• Compare Loan Options: They can present you with offers from multiple lenders, saving you the legwork.
• Guide the Application Process: They often help you gather the necessary paperwork and understand the steps involved.

It’s important to know that brokers get paid, usually through a commission from the lender or sometimes a fee from the borrower. This means their interests might not always perfectly align with yours, so it’s good to be aware of that.

While mortgage brokers can be helpful in finding potential loan options, it’s always a good idea to do your own research and compare offers directly with lenders. Understanding the specific terms, fees, and interest rates is key to making the best decision for your investment property.

Some investors find that working with a broker simplifies the search process, especially if they’re new to investment property financing. They can help sort through the initial options, but remember, the final decision and due diligence are still up to you.

20. Non-QM Lenders

When conventional loans don’t quite fit the bill for your investment property plans, Non-Qualified Mortgages, or Non-QM loans, come into play. These loans are designed for borrowers who might not meet the strict criteria of traditional mortgages. Think of it as a more flexible option for investors who have unique financial situations or are looking at properties that traditional lenders might shy away from.

Non-QM loans are particularly useful for real estate investors because they often focus more on the property’s potential to generate income rather than solely on the borrower’s personal credit score and income history. This can open doors for self-employed individuals, those with fluctuating income, or investors with less-than-perfect credit who still have a solid investment strategy.

Here are some common types of Non-QM loans that investors might consider:

• DSCR Loans: These loans are based on the Debt Service Coverage Ratio, meaning the lender looks at how much rental income the property is expected to generate compared to the mortgage payments. If the property’s income covers the debt, it’s a strong candidate for this type of loan.
• Bank Statement Loans: Instead of relying on tax returns, these loans use 12-24 months of bank statements to verify income. This is great for business owners or self-employed individuals who might have significant deductions that lower their taxable income.
• Asset-Based Loans: For borrowers with substantial assets, these loans use the value of those assets as collateral, offering an alternative to traditional income verification.

These loans often come with different terms than conventional mortgages. You might see higher interest rates or fees, and the down payment requirements can vary. However, the upside is the increased accessibility for a wider range of investors and properties.

Non-QM lenders create their own lending rules. This means they can often make decisions faster and are more transparent about what you need to qualify. They might look at the property’s cash flow potential instead of your personal financial profile, which can be a big help if your income isn’t straightforward.

When looking for a Non-QM lender, it’s wise to compare rates, fees, and terms carefully. Because these lenders set their own standards, the specifics can differ significantly from one institution to another. Some specialize in certain types of Non-QM loans, so finding one that aligns with your investment goals is key.

21. Veterans United

Veterans United is a lender that really focuses on VA loans, and they’re known for originating a lot of them. While VA loans typically aren’t for investment properties in the traditional sense, they can be used for multi-unit dwellings if you plan to live in one of the units. This flexibility means Veterans United can sometimes help investors, especially those who are veterans themselves.

In 2024, they funded a modest number of loans that were classified as investment property loans. The average interest rate on these loans was around 7.05%, which was pretty competitive. What’s interesting is their average loan-to-value (LTV) ratio was quite high, meaning borrowers often put down less money upfront. This is a hallmark of VA loans, which are backed by the federal government, allowing for more flexible terms.

When it comes to customer experience, Veterans United generally scores well. They offer free credit counseling, which is a nice perk. Their educational resources are also rated highly, which can be super helpful when you’re trying to figure out the ins and outs of home loans.

• Specialization: Primarily focuses on VA loans for military borrowers.
• Loan Flexibility: Can accommodate multi-unit properties where the owner resides.
• Customer Support: Offers free credit counseling and strong educational materials.

While Veterans United is a top choice for VA loans, their specific options for pure investment properties (where the borrower doesn’t live on-site) might be more limited compared to lenders who specialize solely in investor financing. It’s worth exploring their offerings if you’re a veteran looking to purchase a multi-unit property to live in.

Their online experience is rated decently, and they have a strong reputation based on consumer reviews. If you’re a veteran or active-duty military member looking into financing options that might include an owner-occupied investment property, Veterans United is definitely a company worth looking into.

22. Investopedia

When you’re looking for information on investment property loans, Investopedia is a site that often comes up. They’ve been around since 1999, and they’ve put together a lot of resources to help people figure out the best ways to finance real estate investments. They actually have a process where they look at a bunch of different lenders, collecting data on things like loan costs, how they underwrite loans, and what the customer experience is like. It’s their way of trying to give an unbiased look at the options out there.

Investopedia breaks down how they choose the best loans, too. They gather hundreds of data points from various lenders, including banks and finance companies. They check out interest rates, fees, loan terms, and customer service. They even look at data from the Home Mortgage Disclosure Act to see what average rates and loan-to-value ratios look like in the real world. It’s a pretty detailed approach.

Here’s a general idea of how they weigh different factors:

• Loan Types: 15%
• Operational Features: 12%
• Customer Experience: 36%
• Reputation: 9%
• Loan Costs and Terms: 28%

They also mention that their compliance team keeps an eye on changes, like interest rates and fees, to make sure their pages stay accurate. So, if you’re doing your homework on financing an investment property, checking out Investopedia can give you a solid starting point. They aim to help you make a good choice for your specific needs, whether you’re looking at conventional loans or something more specialized. You might even find their insights helpful when comparing different types of financing, like those offered by institutions such as China Construction Bank.

The process Investopedia uses involves collecting and analyzing a wide range of data points from numerous lenders. This includes examining loan costs, underwriting practices, and customer satisfaction to provide readers with a comprehensive overview of the market. Their methodology is designed to offer an objective perspective on the best financing options available for investment properties.

23. Mashvisor

Finding the right investment property can feel like searching for a needle in a haystack, especially when you’re trying to do it quickly and efficiently. That’s where a platform like Mashvisor comes into play. It’s designed to help real estate investors cut down on the time spent researching markets and individual properties, aiming to turn what could take months into a much shorter process.

Mashvisor offers tools to help you pinpoint promising areas for rental properties. Their heatmap feature lets you look at neighborhoods based on different criteria, like potential rental income or cash-on-cash return. Once you’ve identified a few spots that look good, you can dig deeper with neighborhood analysis tools. These give you data points to help decide if a particular area is a solid choice for your investment goals.

When it comes to finding actual properties, Mashvisor has a search engine that pulls from various sources, including MLS listings and some off-market deals. You can filter these listings by things like your budget, the type of property, and even expected return on investment. After you find a property that catches your eye, Mashvisor’s calculator can help you analyze its potential. It provides a breakdown of key financial metrics:

• Listing price
• Startup costs
• Projected monthly rental income
• Recurring expenses
• Estimated occupancy rate
• Potential cash flow
• Cash-on-cash return
• Capitalization rate (Cap rate)

This calculator also includes a mortgage tool. You can input details about potential loans, like the down payment amount, loan term, and interest rate, to see how different financing options might affect your investment’s profitability. It’s a way to get a clearer picture of the financial implications before you commit.

Mashvisor aims to simplify the complex process of real estate investment analysis by providing data-driven tools. It helps investors make more informed decisions by consolidating market research, property search, and financial calculations into a single platform.

While Mashvisor provides the data and analysis tools, remember that securing the right loan is a separate, though related, step. The platform can help you model different loan scenarios, but you’ll still need to work with lenders to find the best mortgage product for your specific situation.

24. Real Estate Agents

When you’re looking for investment properties, especially if you’re new to the game, a good real estate agent can be a real asset. They know the local market inside and out, which can save you a ton of time and effort. Think about it: they’re already plugged into what’s available, often before it hits the wider market.

Their local knowledge can help you spot opportunities you might otherwise miss. Agents understand neighborhood trends, property values, and potential rental income, which are all key factors for a successful investment. Plus, they handle a lot of the legwork, like scheduling showings and gathering property information.

Here’s how they can help:

• Market Insights: Agents provide data on local rental rates, vacancy rates, and property appreciation trends.
• Property Identification: They can help you find properties that fit your investment criteria, whether you’re looking for single-family homes, multi-family units, or commercial spaces.
• Negotiation: A skilled agent can negotiate the purchase price and terms on your behalf, potentially saving you money.
• Transaction Management: They guide you through the complex process of making an offer, inspections, appraisals, and closing.

It’s worth noting that in most residential real estate transactions in the U.S., the seller typically pays the buyer’s agent commission. This means you can often get professional representation without direct out-of-pocket costs for their services. Finding the right agent is like finding a good partner for your investment journey; they can make a significant difference in your results. You can find agents through referrals from other investors or by looking at agents who specialize in investment properties in your target areas. It’s a good idea to interview a few agents before settling on one to ensure they align with your investment goals. They can also be a great resource for connecting you with other professionals, like property managers or contractors, which is helpful for managing your investment property analysis.

Working with a real estate agent can streamline the property search and acquisition process. Their expertise in local markets and negotiation tactics can be particularly beneficial when aiming to secure a profitable investment property.

25. Investment Property Analysis and more

Once you’ve identified potential lenders and loan types, the next step is to thoroughly analyze the investment property itself. This isn’t just about looking at the asking price; it involves a deep dive into the numbers to see if the property makes financial sense. Accurate analysis is the bedrock of successful real estate investing.

Key metrics to consider include:

• Listing Price: The initial cost of the property.
• Startup Costs: Expenses like closing costs, initial repairs, and holding costs before the property is rented.
• Monthly Rental Income: The projected income from rent.
• Recurring Expenses: Ongoing costs such as property taxes, insurance, maintenance, and property management fees.
• Occupancy Rate: The percentage of time the property is expected to be rented.
• Cash Flow: The net income after all expenses are paid.
• Cash-on-Cash Return: The annual return on the actual cash invested.
• Capitalization Rate (Cap Rate): A measure of the property’s profitability relative to its price.

Understanding these figures helps you compare different properties and markets. For instance, you might use a tool to compare the potential returns of a property in one city versus another, factoring in local market conditions and rental rates. This kind of detailed work can turn months of research into a much shorter timeframe, allowing for quicker decisions.

Lenders will look closely at how a property is expected to perform. They want to see that the potential rental income is sufficient to cover the mortgage payments and other operating expenses. Metrics like the Debt Service Coverage Ratio (DSCR) are often used to gauge this ability. A DSCR above 1 indicates the property’s income can cover its debt obligations.

Beyond the numbers, consider the property’s condition and location. Are there immediate repair needs? Is the neighborhood desirable for renters? Thinking about these aspects, alongside the financial analysis, provides a more complete picture. This thorough approach helps in making informed decisions and securing the right financing for your investment goals. For those looking to modernize their approach to real estate analysis, exploring technology advisory services can offer new perspectives on data management and operational efficiency.

Wrapping Up Your Investment Property Loan Search

Finding the right loan for your investment property in 2025 is a big step, and it’s definitely worth taking the time to get it right. We’ve looked at different loan types, from conventional mortgages to more specialized options like hard money loans, and talked about how interest rates and market trends can play a role. Remember, the best loan for you will depend on your specific financial situation and investment goals. Don’t be afraid to compare offers from various lenders, and consider working with a real estate agent who can help guide you through the process. With careful planning and research, you can secure financing that supports your real estate investment journey.

Frequently Asked Questions

What’s the main difference between a loan for a regular house and a loan for an investment property?

When you borrow money to buy a place to live in, it’s usually a standard home loan. But if you’re buying a property just to rent it out or fix it up to sell, that’s an investment property loan. Lenders often see these as a bit riskier, so the rules and interest rates might be different compared to loans for your own home.

Do I need a lot of money saved up to get an investment property loan?

It often helps to have a good amount saved for a down payment, which is the money you pay upfront. Some loans might ask for a bigger down payment than a loan for your own house. However, there are different loan types, and some might work even if you don’t have a huge amount saved, especially if the property itself looks like a good investment.

Are interest rates higher for investment property loans?

Generally, yes. Because lenders see investment properties as a bit more of a gamble than a primary home, they often charge higher interest rates. This means your monthly payments could be more. But, the exact rate depends on the type of loan, your financial situation, and what’s happening with the economy.

What’s a DSCR loan, and why is it popular for investors?

DSCR stands for Debt Service Coverage Ratio. These loans are popular because they focus more on how much money the property is expected to make from rent, rather than just your personal income. If the rent collected is enough to cover the loan payments, it’s a good sign for the lender. This makes it easier for investors to qualify, even if their personal finances aren’t perfect.

Can I use a loan for an investment property if I’m new to real estate investing?

Yes, absolutely! There are many loan options out there designed for investors, including beginners. While some loans might require more experience or a larger down payment, others are more flexible. The key is to research and find a loan type that matches your financial situation and investment goals.

What’s the benefit of working with a mortgage broker for an investment property loan?

A mortgage broker acts like a matchmaker between you and different lenders. They can shop around for you to find loan options from various banks and financial companies. This can save you time and effort, and they might be able to find a loan with better terms than you could find on your own.

Peyman Khosravani

Peyman Khosravani is a global blockchain and digital transformation expert with a passion for marketing, futuristic ideas, analytics insights, startup businesses, and effective communications. He has extensive experience in blockchain and DeFi projects and is committed to using technology to bring justice and fairness to society and promote freedom. Peyman has worked with international organizations to improve digital transformation strategies and data-gathering strategies that help identify customer touchpoints and sources of data that tell the story of what is happening. With his expertise in blockchain, digital transformation, marketing, analytics insights, startup businesses, and effective communications, Peyman is dedicated to helping businesses succeed in the digital age. He believes that technology can be used as a tool for positive change in the world.