A loan on a house you will not live in is a different product from the one you used to buy your home. Same paperwork, different thresholds, and two of them catch people out: the cash that has to still be sitting in your account after closing, and how little of the rent counts toward qualifying.
This is a checklist. Each item links to the post that works it through.
How much do you have to put down on an investment property?
Fifteen percent on a single-family rental, and twenty-five percent on two to four units. Freddie Mac’s maximum LTV table caps a 1-unit investment property purchase at 85% of the price and a 2- to 4-unit investment purchase at 75%. Both are lower than the 95% a buyer can borrow on a 1-unit home they live in, and lower than the 90% on a second home.
Fifteen percent down is the floor, not the cheap option. A loan above 80% of the price normally carries mortgage insurance, and the rate on a smaller down payment is usually higher. The PMI post has the sourced detail, and it runs this same house at 15%, 20% and 25% down so you can see which one actually leaves more money.
What payment does the lender count?
More than the mortgage. Lenders qualify you on the full housing payment: principal, interest, taxes, insurance and any association dues. On a $250,000 rental bought with 20% down on a 30-year loan at 7%, with $3,000 of property taxes and $1,400 of insurance a year, that comes to $1,697 a month.
| Each month | |
|---|---|
| Principal and interest on the $200,000 loan | $1,331 |
| Property taxes ($3,000 a year) | $250 |
| Insurance ($1,400 a year) | $116 |
| Association dues (this house has none) | – |
| The payment the lender counts | $1,697 |
These are example figures, not a quote.
The $1,331 is the only part a rate quote covers. The other $366 is why a payment estimate from a mortgage calculator comes in low.
How much do you need in reserves?
Reserves are money that has to still be in your accounts after closing, counted in months of that $1,697. Fannie Mae’s minimum reserve requirements ask for six months on an investment property, against none on a one-unit home you live in and two months on a second home. That topic was last dated August 7, 2024.
Six months of $1,697 is $10,184. You do not spend it, but it has to be there before the loan closes, which makes it part of what you save. The full cash list adds it to the down payment, the closing costs and the work before the first tenant.
What credit score does an investment property loan need?
It depends on how the loan is underwritten. Fannie Mae’s credit score requirements, as updated on April 22, 2026, set a minimum of 620 on a manually underwritten fixed-rate loan and 640 on an adjustable-rate loan. For a loan run through Desktop Underwriter, Fannie Mae’s automated system, the guide says plainly that a minimum credit score is not required, because the system weighs the whole file instead.
That is the floor, not the price. The same page says eligibility also depends on the credit score together with the highest loan-to-value ratio, the loan purpose, the number of units, the amortization type and your debt-to-income ratio, all set out in Fannie Mae’s Eligibility Matrix. A 620 score with 15% down is a different question from a 620 with 25% down.
Which score counts is worth knowing too. With one borrower the lender uses the representative credit score, and with more than one borrower it uses the average median score of the borrowers. So a strong co-borrower does not simply replace a weak score, and the rate you are quoted keeps improving well above 620.
How much of the rent counts toward qualifying?
Seventy-five percent of it, and only after the payment comes out. Fannie Mae’s rule for rental income from the subject property, dated September 2, 2026, is to multiply the monthly gross rent by 75% and subtract the property’s full housing payment. On a $2,750 rent, 75% is $2,063, and after the $1,697 payment the lender counts $365 a month in your favor.
The missing 25% is not a fee, it is a haircut. It also happens to be close to the real thing: on this house, vacancy, maintenance, replacements and management come to $633 a month, or 23% of the rent. If the subtraction comes out negative, the shortfall is added to your debts instead. There is more detail, including what happens with less than a year of landlord experience, in using rental income to qualify.
What changes once you own more than one rental?
The reserve requirement grows, because it starts counting your other properties. Fannie Mae’s reserve topic adds reserves of 2% of the combined unpaid balances on your other financed properties when you have one to four of them, 4% at five to six, and 6% at seven to ten through Desktop Underwriter only.
On a first rental that line is zero. On a second one, with $188,263 still owed on the first after five years, it adds $3,765 to the cash you must show, on top of the six months on the new house.
If the income side is the part that stops you, a DSCR loan qualifies the property’s rent instead of your pay, at a higher rate and usually a larger down payment. The comparison of the two runs this same house both ways.
What order should you do this in?
Get the score first, because it is the slowest to move and it sets the rate everything else is priced at. Then add up the cash twice: once as the down payment plus closing costs, and once as the reserves that must survive closing. Then take a rent estimate to a lender and ask what payment they would count and what they would credit you from the rent, using the figures above as the shape of the answer. The gap between those two numbers is the whole conversation.