Financing & LoansQuestion 17
What Are Conventional Loan Requirements for Investment Property?
Conventional investment property loans require 20–25% down, 620+ credit score (720+ preferred), 6 months reserves, and a debt-to-income ratio under 45%.
Conventional loans from Fannie Mae/Freddie Mac-backed lenders are the most common financing for Houston investment properties.
- Down payment: 20% for SFH, 25% for 2–4 units.
- Credit score: 620 minimum, 720+ for best rates.
- Reserves: 6 months of mortgage payments per property.
- DTI ratio: 43%–45% maximum debt-to-income.
- Property limit: Fannie Mae allows up to 10 financed properties per borrower.
- Rate premium: Expect 0.5%–0.75% higher rate vs. primary residence loans.
Bottom Line
Conventional loans offer the best rates for Houston investment properties but have strict qualification requirements. They're ideal for W-2 earners with strong credit buying their first few rentals.