Mortgages for Investment and Rental Properties

Can You Use a VA or an FHA Loan for an Investment or Rental Property?

If the home you buy will not be your primary residence, you generally would not qualify for a VA or an FHA purchase loan. The Department of Veterans Affairs and the Federal Housing Administration (which back VA and FHA loans, respectively) generally require that purchase loans be used for primary residences.

It may be possible for you to purchase a property with up to four units with an FHA loan if you occupy one of the units as your primary residence. Learn more about FHA loans for investment properties.

Conventional Loans for Investment and Rental Properties

You may be eligible for a Conventional or Jumbo loan, whether or not the property you want to purchase or refinance will be your primary residence, subject to the loan program’s property, occupancy, and financial requirements. Conventional loans are offered by private lenders without a government guarantee. They may have higher credit score requirements and more stringent financial requirements than VA and FHA loans.

Conforming Conventional loans have limits on the amount of money you can borrow. The 2026 conforming loan limit for one-unit properties is $832,750 in most of the United States. If you want to finance an investment or rental property with a loan up to the applicable limit, a conforming Conventional mortgage may be a good fit. Conforming loan limits can change each year and vary by the number of units, and the loan limit is often higher in more expensive areas of the country, like New York City and parts of California.

Jumbo Loans for Investment and Rental Properties

Jumbo loans are basically Conventional mortgages for amounts greater than the applicable conforming loan limits. They are a type of nonconforming mortgage. If you want to finance an investment or rental property with a loan above the conforming limit for its location and number of units, you’ll likely need to apply for a Jumbo loan. Jumbo loans often have stricter requirements, because the loan amount is larger. Many lenders want a higher credit score and lower debt-to-income ratios.

Rental and Investment Property Loan Requirements

The loan application process for rental and investment properties is a lot like applying for a primary home loan. It’s still a good idea to get the home inspected, and it will likely still need to be appraised. You should expect to provide your financial history and proof of income, and submit to a credit inquiry. You’ll also still need to pay closing costs.

Can I Get an Investment Property Loan with a Low Down Payment?

You may still be eligible for a loan for an investment or rental property with a lower down payment, depending on the loan program and whether you will occupy the property as your primary residence. Properties you do not occupy generally require a larger down payment than primary residences. Keep in mind that the size of your down payment may affect other costs.

When Should You Refinance an Investment or Rental Property?

There are a few reasons to refinance an investment or rental property. Many people refinance their loans to lower their interest rate, which, in turn, can lower their monthly payments. By refinancing, the total finance charges may be higher over the life of the loan. Refinancing can also result in a shorter loan term. When you refinance, you’ll replace your existing mortgage with a new mortgage that may have a better interest rate or terms for your circumstances.

Existing FHA loans can be refinanced into new FHA mortgages, just as existing VA loans can be refinanced into new VA mortgages, if you meet the new loan program’s occupancy and other requirements. You can also refinance existing FHA, VA, and Conventional loans with Conventional refinances, subject to the new loan’s requirements.

Conventional Refinancing for Investment or Rental Properties

Conventional refinances come with similar terms as Conventional loans. Existing mortgages of different types may be eligible for Conventional refinancing. You should expect a new application, credit inquiry, home appraisal, and a new set of closing costs. If your loan-to-value ratio is above 80% after the refinance closes, meaning you retain less than 20% equity based on the appraised value, private mortgage insurance is generally required for a conforming Conventional refinance. Some investment-property refinance programs require more equity and do not permit loan-to-value ratios above 80%.

FHA or VA Refinancing for Investment or Rental Properties

One difference between buying and refinancing an investment property with government-backed loans is the occupancy requirements for certain streamline refinances. With a VA IRRRL Streamline Refinance of an existing VA loan, you’ll need to document that you previously occupied the property as your primary residence; you don’t need to currently occupy a unit. An existing FHA loan on a property you no longer occupy may also be eligible for an FHA Streamline Refinance. Freedom Mortgage permits investment properties under its fixed-rate FHA Streamline Refinance program. These exceptions do not generally apply to FHA or VA refinancing.

Freedom Mortgage offers an FHA Streamline Refinance program and a VA IRRRL Streamline Refinance program that may allow you to refinance with less paperwork, depending on your loan and state requirements. Credit-qualifying transactions still require you to meet applicable credit and income requirements. This may allow you to close more quickly—sometimes, in less than 30 days. However, neither of these streamline products allow you to take cash out of your property’s equity.

Freedom Mortgage is not a financial advisor. The ideas outlined above are for informational purposes only and are not investment or financial advice. Consult a financial advisor before making important financial decisions.