There is no single list of investment property loan requirements. There are three, and which one applies depends on who reads your file. A conventional lender reads your tax returns through Fannie Mae's rules. A DSCR lender reads the property's rent. A hard money lender reads the deal. This page goes through what each one checks, with the conventional rules taken straight from Fannie Mae's Selling Guide, because that is the file most investors misread.
A conventional lender underwrites you. Your income, your debts, your tax returns, your credit and your cash, under Fannie Mae or Freddie Mac rules, because that is who will buy the loan. It is the cheapest money, and the most paperwork.
A DSCR lender underwrites the property's rent against its payment. Your personal income never enters the calculation, which is the point. Credit and cash still matter. The DSCR requirements have their own page.
A hard money lender underwrites the deal: what the property is worth now, what it will be worth after the work, and how the loan gets paid off. It is the most expensive money and the least paperwork, and it is short-term.
Most of what investors get wrong about requirements comes from applying one lender's rules to another's file. So take them one at a time, starting with the one that has written rules anyone can read.
Fannie Mae's Selling Guide is public, and its rental income rules explain most of the surprises investors hit.
Rent is counted at 75 percent. When the lender uses a lease or the appraiser's market rent, it multiplies the gross monthly rent by 75 percent. The other quarter is assumed to be lost to vacancy and maintenance. A house renting for $2,000 a month qualifies you for $1,500.
The appraiser's rent schedule backs it up. For a single-family rental the appraiser completes Form 1007, a comparable rent schedule. For a two-to-four unit property the rent analysis is part of Form 1025. For an existing lease, the lender wants proof the rent is actually being paid: two consecutive months of bank statements or transfers, or, on a new lease, the deposit and first month's rent with proof they were deposited.
Your tax return is read with add-backs. This is where the story about tax returns ruining investors gets only half right. When a lender uses Schedule E, Fannie Mae's rules have it add back depreciation, mortgage interest, association dues, taxes and insurance to the net figure. A property that shows a paper loss because of depreciation is not treated as losing that money. What does hurt is a genuine cash loss, or a new property with no rental history on the return yet.
So before assuming your returns disqualify you, ask a lender to run the Schedule E calculation with the add-backs. The answer is often better than the bottom line on the return suggests.
Conventional reserves come in two parts, and the second is the one that catches growing investors.
Reserves for the property you are buying, in months of its full payment, set by Fannie Mae's automated underwriting system for your file.
Reserves for your other financed properties, calculated as a percentage of what you still owe on them, not counting your own home or the new property. Under Fannie Mae's rules it is 2 percent of that balance if you will have one to four financed properties, 4 percent at five or six, and 6 percent at seven to ten.
Watch what that does to a real investor. You own your home, with a mortgage, and two rentals owing a combined $360,000. Buying a third rental takes you to four financed properties, so you need 2 percent of $360,000: $7,200, on top of the new property's own reserves. A year later you own three rentals owing $540,000 and buy a fourth. That is five financed properties, the rate doubles to 4 percent, and the requirement becomes $21,600. The cash you need grew three times faster than the balances did.
Plan for the step, not the average. The purchase that moves you from four financed properties to five costs more in reserves than any before it.
Fannie Mae limits an investment property borrower to ten financed properties. Three details in how they are counted matter more than the number:
Your home counts if it has a mortgage. A paid-off home does not.
A duplex is one property. Multi-unit buildings of up to four units count once, not once per unit.
Properties in an LLC may not count at all. The count covers properties where you are personally obligated on the mortgage. Fannie Mae's own example is a borrower with four two-unit rentals financed in an LLC that they half own, who is not personally obligated on those loans, so the properties are left out of the count. That is one reason investors move to entity-based DSCR loans as they grow: those loans live outside the conventional count.
Two other conventional rules to know. Gift money is not allowed for an investment property, so the down payment has to be your own funds, though money borrowed against an asset you own, such as a home equity line, can qualify when it is documented. And commercial property, buildings of five or more units and vacant land do not count toward the ten at all.
A business-purpose lender does not read your tax returns at all. It reads the deal and the borrower's ability to finish it. Our lending partners' underwriting guidelines spell out what that means:
The borrower is an entity. An LLC, corporation or trust, generally with no more than three owners, and every owner of 30 percent or more personally guarantees the loan.
Credit is checked, not decisive. The fix and flip and bridge programs list a 600 minimum score, and a bankruptcy, foreclosure or short sale in the last 36 months generally makes a borrower ineligible.
Cash in the bank. At least $15,000 in reserves on renovation loans, shown before closing.
The property qualifies. A non-owner-occupied home with an after-repair value of at least $100,000, within about 45 to 60 minutes of a metro area of 200,000 people or more, on no more than two acres.
The deal works on paper. A projected profit of at least 10 percent of the loan amount, and for borrowers with one or no completed deals, a renovation budget of no more than $40,000.
The leverage is capped. Up to 100 percent of cost, but never more than 70 percent of after-repair value, and 50 percent in six named counties: Philadelphia, Cook, Cuyahoga, Baltimore, St. Louis and Wayne.
You rarely get to change your file. You can choose whose rules it is read under.
Clean W-2 income, few properties, a finished house: conventional is usually the cheapest, and the rules above are worth meeting.
Self-employed, heavily depreciated, or past four or five properties: a DSCR loan reads the rent instead. Our lending partners' DSCR program runs from $75,000 to $2 million at up to 80 percent of value, with rates from 5.99 percent on the program page.
A property that needs work, or a deal that has to close fast: a hard money loan now, then a DSCR or conventional refinance once the house is finished and rented. The 10.99 percent starting rate on our lending partners' fix and flip and bridge loans is available after two loans have been paid off in good standing with our lending partner; a first-time borrower should expect to start above it and earn the way down.
All of our lending partners' programs are business-purpose loans on non-owner-occupied property, and terms change, so we confirm current requirements for your deal before you commit to it.
It depends on the loan. A conventional investment mortgage requires documented personal income, a credit check, a down payment from your own funds and reserves that grow with the number of properties you finance. A DSCR loan qualifies on the property's rent instead of your income. A hard money loan qualifies mainly on the property and the plan, with credit and cash requirements that are usually lighter.
Under Fannie Mae's rules, a lender using a lease or the appraiser's market rent counts 75 percent of the gross monthly rent. The other 25 percent is assumed to go to vacancy and maintenance. DSCR lenders generally use the full rent, measured against the full payment.
Not on a conventional loan sold to Fannie Mae, which does not allow gift funds for an investment property. Money borrowed against an asset you own, such as a home equity line, can be used if it is documented. DSCR and private lenders set their own rules, and some accept gifts.
Fannie Mae allows up to ten financed properties, counting your home if it has a mortgage. Properties held in an LLC where you are not personally liable on the mortgage are not counted. DSCR and hard money lenders set no such limit, though they look at your total experience and exposure.
For a conventional loan, the reserve for the property you are buying is set by Fannie Mae's automated underwriting, plus 2, 4 or 6 percent of what you owe on your other financed properties, depending on how many you have. Our lending partners' renovation loans call for $15,000 in reserves.
Generally yes. A conventional or DSCR loan will use a full appraisal with a rent schedule, and a hard money lender appraises both the current value and the after-repair value. On a rental, the appraiser's rent opinion can matter as much as the value.
Conventional rules: Fannie Mae Selling Guide, including B2-2-03 (multiple financed properties), B3-4.1-01 (minimum reserves) and the B3-3.8 rental income topics, as published September 2026. Lending partner terms: published program page and underwriting guidelines; terms change and are confirmed for your deal.
Before you size your reserves, our two free landlord books show what a rental really costs to hold across twelve states.
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Dominion Hard Money does not lend its own funds; it arranges financing through third-party lending partners. All financing is arranged for business purposes only and secured by non-owner-occupied investment property. Not a commitment to lend. All loans subject to underwriting, property review, and approval by the lender. Terms vary by property, borrower experience, and exit strategy.