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Rental Property Financing — Loans for Buy-and-Hold Investors
Buying rental properties builds long-term wealth through cash flow, appreciation, and loan paydown. Whether you're purchasing your first rental or expanding a portfolio, understanding your financing options is key to maximizing returns.
Trusted by over 2,500 California families
Multiple
Loan Options
Portfolio & DSCR
Programs
SFR to
Multi-Family
Find the Right Rental Property Loan
No impact to your credit score.
Find the Right Rental Property Loan
No impact to your credit score.
Rental Property Loan Options
There's no one-size-fits-all loan for rental properties. The right choice depends on your income documentation, number of properties, and growth strategy.
Conventional Loans
Best rates available
- •15-25% down payment required
- •Full income documentation (W-2s, tax returns)
- •Maximum 10 financed properties
- •Best for W-2 employees with strong income
DSCR Loans
No income verification
- •Qualify based on rental income alone
- •Unlimited financed properties
- •20-25% down payment
- •Ideal for self-employed and portfolio builders
Portfolio Loans
Flexible underwriting
- •Held by local banks (not sold to agencies)
- •May allow more properties than conventional
- •Relationship-based lending
- •Terms vary widely by institution
Commercial Loans (5+ Units)
For apartment buildings
- •Based on property NOI (net operating income)
- •20-30% down payment required
- •5-10 year terms with balloon payments
- •Best for experienced investors scaling up
Conventional vs. DSCR for Rentals
Conventional
- Income: Full docs required
- Max Properties: 10
- Down Payment: 15-25%
- Rates: Lower (agency-backed)
- DTI: Must qualify
- LLC: Personal name only
- Best For: W-2 earners, first rentals
DSCR
- Income: No verification
- Max Properties: Unlimited
- Down Payment: 20-25%
- Rates: Slightly higher
- DTI: Not considered
- LLC: Allowed
- Best For: Self-employed, scaling
Hybrid Approach:
Many successful investors use conventional loans for their first 4-5 properties to lock in the best rates, then switch to DSCR loans to continue scaling without income limitations.
Rental Property Loan Requirements
Conventional Credit
- Minimum: 680+ credit score
- Best rates: 720+ credit score
- Impact: Lower scores = higher rates and fees
Conventional Down & DTI
- Down payment: 15-25%
- DTI limit: Under 45%
- Reserves: 2-6 months per property
Conventional Docs
- Income: Full documentation required
- Tax returns: 2 years required
- Employment: Verified by lender
DSCR Credit
- Minimum: 660+ credit score
- Some lenders: Accept 620+
- Best terms: 720+ credit score
DSCR Down & Ratio
- Down payment: 20-25%
- DSCR minimum: 1.0+ (rent covers payment)
- Reserves: 6-12 months required
DSCR Documentation
- Income: No personal income docs needed
- Qualifying: Rental income only
- Appraisal: Market rent analysis required
Strategies for Building a Rental Portfolio
Successful rental investors use proven strategies to acquire properties efficiently and build wealth over time.
House Hacking
Buy a 2-4 unit property with an FHA loan (3.5% down). Live in one unit and rent the others. After 12 months, move out and repeat the process with a new property.
BRRRR Method
Buy undervalued properties, rehab them to increase value, rent them out, refinance to recover your capital, then repeat the process with the recovered funds.
Scale with DSCR
After hitting conventional loan limits (10 properties), switch to DSCR loans for unlimited growth. No personal income verification means no ceiling on your portfolio.
Leverage Appreciation
Cash-out refinance appreciated properties to pull equity and recycle capital into new acquisitions. Use your existing portfolio to fund future growth.
How Rental Income Is Calculated
How lenders count rental income differs significantly between conventional and DSCR loans, and it directly affects how many properties you can finance.
Conventional Calculation
- Method: 75% of market rent added to personal income
- Subject to: Total DTI ratio limits
- 25% haircut: Accounts for vacancies and maintenance
DSCR Calculation
- Method: 100% of market or actual rent compared to PITIA
- No personal income: Property stands on its own
- PITIA: Principal, Interest, Taxes, Insurance, Association dues
Example: Market Rent $2,500/mo
- Conventional: Adds $1,875 to your qualifying income (75% of $2,500)
- DSCR: Compares $2,500 rent to $2,000 PITIA payment = 1.25 DSCR (qualifies)
Short-Term Rental (Airbnb) Financing
Financing vacation rentals and short-term rentals requires lenders who understand the unique income patterns of platforms like Airbnb and VRBO.
Traditional Lenders
- Treat the property as a standard long-term rental
- Use conservative long-term rent estimates
- May not consider higher STR income potential
STR-Friendly Lenders
- Accept actual STR income with 12+ months history
- DSCR programs are more flexible for STR properties
- May use market STR data for new acquisitions
Documentation Needed
- Airbnb/VRBO income statements (12+ months)
- Tax returns showing short-term rental income
- Market analysis from platforms like AirDNA
Loan Programs for Every Need
We offer a comprehensive range of mortgage products. The right loan depends on your situation, goals, and financial profile — and we'll help you find the perfect fit.
DSCR Loans
Best for: investors qualifying by rental income.
How it works: Approval is based on property cash flow, not personal income.
Key features:
- No personal income docs
- 620+ credit, 20–25% down
- Unlimited properties
Conventional Investment Loans
Best for: strong W-2 investors.
How it works: You qualify using personal income, credit, and assets.
Key features:
- Lowest rates
- 620+ credit (700+ ideal)
- Up to 10 properties
Portfolio Loans Options
Best for: complex or large portfolios.
How it works: Lender creates a custom loan outside standard guidelines.
Key features:
- Flexible underwriting
- Finance 10+ properties
- Relationship-based
Fix & Flip (Bridge Loans)
Best for: renovate-and-sell investors.
How it works: Short-term loan for purchase and rehab, repaid at sale or refi.
Key features:
- Fast closings (7–14 days)
- Based on ARV
- Covers purchase + rehab
Cash-Out Refinance (Investors)
Best for: pulling equity to reinvest.
How it works: Refinance and extract cash from existing property value.
Key features:
- Access up to 75–80% value
- Use funds for any purpose
- DSCR or conventional options
Blanket Loans
Best for: multiple properties.
How it works: One loan covers several properties under one payment.
Key features:
- One loan, one payment
- Finance 5+ properties
- Portfolio consolidation
Short-Term Rental Loans
Best for: Airbnb/VRBO investors.
How it works: Qualify using projected or actual short-term rental income.
Key features:
- DSCR-based
- 20–25% down
- Uses STR income data
Bank Statement Loans
Best for: self-employed borrowers without traditional income docs.
How it works: You qualify using 12–24 months of bank deposits instead of tax returns.
Key features:
- No W-2s or tax returns
- Personal or business statements
- 620+ credit typical
- 10–20% down
Rental Property Loan Questions, Answered
Everything you need to know about financing rental properties. Can't find your answer? Reach out and we'll help.
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Years Experience
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Build Your Rental Portfolio
Every rental property brings you closer to financial freedom. Let's find the right financing for your next investment.
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