Financing & LoansQuestion 23
What Is a Portfolio Loan for Houston Investors?
A portfolio loan is held by the originating bank (not sold to Fannie/Freddie), offering flexible terms for investors who don't fit conventional loan guidelines.
Portfolio loans are kept on the bank's own books, giving them flexibility to set their own underwriting criteria.
- Flexible qualification: Banks can consider rental income, overall portfolio strength, and relationship history rather than strict DTI ratios.
- Who offers them: Local and regional Houston banks, credit unions. Not the big national banks.
- Best for: Investors with 5+ properties, self-employed borrowers, or unique property types that don't fit conventional guidelines.
- Typical terms: 5–7 year ARMs with 25–30 year amortization, rates slightly above conventional.
Bottom Line
Build relationships with 2–3 local Houston banks early in your investing career. Portfolio loans become invaluable once you outgrow conventional financing options.