Quick Answer
An illustrative scenario describing a borrower with a 740 score and a 20% down payment financing a $300,000 single-family rental at conventional investment-property rates.
Key Takeaways
- Investment property loans typically require larger down payments.
- Reserve requirements differ from primary residence.
- Rates are higher than primary-residence financing.
Setup
The scenario assumes a borrower with strong personal credit, sufficient reserves, and a target single-family property with established rental comparables.
Outcome
The educational example demonstrates how the spread between expected rent and mortgage service determines whether the deal supports itself.
Frequently Asked Questions
How is investment property credit different?
Lenders typically apply stricter down payment, reserve, and DTI requirements to investment property loans than to primary residence loans.