A conventional loan can finance a 1- to 4-unit investment property as long as the borrower and property meet Fannie Mae or Freddie Mac requirements.
Compared with a primary residence, you generally need more money down, additional cash reserves and stronger overall qualifications.
This guide focuses on conforming conventional loans eligible for purchase by Fannie Mae or Freddie Mac.
If you are still comparing financing options, our broader investment property mortgage requirements guide covers both conventional and non-QM programs.
You can also review how a conventional mortgage works before getting into the investment-property rules.
Conventional Investment Property Loan Basics
| Requirement |
1-Unit Investment Property |
2- to 4-Unit Investment Property |
| Maximum purchase LTV |
85% |
75% |
| Minimum down payment based on agency LTV limits |
15% |
25% |
| Underwriting |
Automated underwriting required |
Automated underwriting required |
| Rental income |
May be used when agency documentation and calculation requirements are met |
May be used when agency documentation and calculation requirements are met |
| Fannie Mae DU reserves |
Generally 6 months for the subject investment property |
Generally 6 months for the subject investment property |
| Fannie Mae financed-property limit |
Up to 10 |
Up to 10 |
These are agency guidelines, not a guarantee of approval.
Individual lenders can apply additional requirements, and automated underwriting evaluates the loan as a whole.
Fannie Mae's eligibility matrix and Freddie Mac's LTV requirements both permit up to 85% LTV on a 1-unit investment-property purchase and 75% on a 2- to 4-unit purchase.
Baseline Conventional Investment Property Guidelines
Investment-property mortgages have a separate set of agency requirements because the property will not be your primary residence.
Fannie Mae defines an investment property as real estate that you own but do not occupy. Freddie Mac likewise has separate eligibility, pricing and underwriting standards for non-owner-occupied properties.
Fannie Mae investment-property mortgages generally must be run through Desktop Underwriter and receive an Approve/Eligible recommendation.
Freddie Mac requires investment-property mortgages to receive an Accept risk class through Loan Product Advisor.
That means qualification is not based on a single credit score or DTI threshold in isolation.
The same basic income, asset, credit and property documentation used for other conventional loans still applies.
The exact documents required depend on your employment, income sources, assets and automated underwriting findings.
The general conventional loan qualification requirements provide more context on that process.
Down Payment Requirements by Unit Count
The minimum down payment for a conventional investment-property purchase is driven primarily by the number of units.
| Property |
Maximum LTV |
Minimum Down Payment |
| 1-unit investment property |
85% |
15% |
| 2-unit investment property |
75% |
25% |
| 3-unit investment property |
75% |
25% |
| 4-unit investment property |
75% |
25% |
A 15% down payment is possible on a 1-unit investment property.
Putting more down, however, can materially change the loan's pricing.
The current Fannie Mae pricing matrix applies progressively larger investment-property adjustments at higher LTVs.
As of September 2026, the investment-property adjustment is 2.125% at 70.01% to 75% LTV, 3.375% above 75% through 80% LTV and 4.125% above 80% through 85% LTV.
These are loan-level price adjustments, not interest-rate increases of the same amount.
The full investment property down payment guide explains how the 15%, 20% and 25% tiers affect the amount you need at closing.
How Credit Affects Conventional Investment Property Pricing
There is no longer a blanket 620 minimum credit score for every Fannie Mae loan submitted through Desktop Underwriter.
Instead, automated underwriting evaluates credit alongside factors such as LTV, reserves, DTI and payment history.
Freddie Mac investment-property loans must similarly receive an Accept recommendation from Loan Product Advisor.
Credit still matters substantially for pricing.
Fannie Mae's current loan-level price adjustment matrix combines a credit-score-and-LTV adjustment with a separate investment-property adjustment.
For example, consider a 30-year purchase loan at 75% LTV using the current Classic FICO pricing grid.
A borrower in the 740-759 range has a 0.375% credit/LTV adjustment, while a borrower in the 680-699 range has a 1.125% adjustment.
Both would also have the 2.125% investment-property adjustment at that LTV.
| Example |
740-759 Score |
680-699 Score |
| Credit/LTV LLPA at 75% LTV |
0.375% |
1.125% |
| Investment-property LLPA |
2.125% |
2.125% |
| Combined adjustments shown in this example |
2.500% |
3.250% |
On a $300,000 loan, the 0.75-percentage-point difference in this example equals $2,250 in loan-level pricing.
That does not mean the borrower necessarily pays $2,250 in cash. Lenders can reflect pricing adjustments through combinations of interest rate and points.
Fannie Mae's current LLPA matrix should be checked when comparing pricing because the grids can change.
The dedicated investment property credit score guide covers these tradeoffs in more detail.
Debt-to-Income Requirements
Conventional underwriting also looks at your debt-to-income ratio, or DTI.
Fannie Mae currently allows a maximum total DTI of 50% for loans underwritten through Desktop Underwriter, although reaching that maximum does not mean the loan will receive an approval.
Automated underwriting weighs DTI alongside the rest of the file.
A borrower with stronger credit, more equity and substantial reserves may receive a different underwriting result than a borrower with the same DTI and fewer compensating strengths.
Rental income can also change the calculation.
If eligible rental income exceeds the property's qualifying housing expense, it may add qualifying income. If the calculation produces a rental loss, that loss can increase the borrower's monthly obligations.
The broader conventional loan DTI requirements explain how the ratio is calculated and used.
Using Rental Income to Qualify
Conventional loans can allow rental income from the property you are buying to help you qualify.
Lenders cannot simply use the advertised rent or the full amount of a signed lease.
Under current Fannie Mae rules, a purchase of a 1- to 4-unit investment property generally requires the appropriate appraisal rental schedule, such as Form 1007 for a 1-unit property or Form 1025 for a 2- to 4-unit property.
A fully executed lease is also required when an existing lease is being transferred to the buyer.
Fannie Mae generally calculates qualifying rent using 75% of documented gross monthly rent.
The remaining 25% accounts for vacancy and ongoing maintenance expenses.
For example, if documented market rent is $3,200 per month, 75% is $2,400.
If the property's monthly principal, interest, taxes, insurance and applicable association dues total $2,350, the calculation produces $50 of positive rental income before any additional agency restrictions are applied.
How much positive rental income can actually be used depends in part on the borrower's rental-property management history.
The rules are more detailed than a simple 75% formula, so the separate guide to using rental income to qualify for an investment property covers the calculation and documentation.
Reserve Requirements
Investment-property loans generally require money left over after you pay the down payment and closing costs.
Fannie Mae refers to those assets as reserves.
For a Fannie Mae investment-property transaction underwritten through Desktop Underwriter, the baseline requirement is generally six months of reserves for the subject property.
Additional reserves apply if you own other financed properties.
Fannie Mae calculates those additional reserves as a percentage of the unpaid principal balance on certain other financed properties:
- 2% when you have one to four financed properties
- 4% when you have five to six financed properties
- 6% when you have seven to 10 financed properties
The subject property and your principal residence are excluded from that additional-reserve calculation.
Fannie Mae's reserve requirements explain the calculation in detail.
Because reserves can become a major constraint as a portfolio grows, the investment property reserve guide breaks down what counts and how much may be required.
Property and Loan Limits
Conventional investment-property financing is available for 1- to 4-unit residential properties.
A property with five or more units falls outside the standard single-family conforming mortgage framework.
For 2026, FHFA set the baseline conforming loan limits at the following amounts in most of the U.S.:
| Units |
2026 Baseline Conforming Loan Limit |
| 1 unit |
$832,750 |
| 2 units |
$1,066,250 |
| 3 units |
$1,288,800 |
| 4 units |
$1,601,750 |
Higher limits apply in designated high-cost counties.
FHFA publishes the current county-by-county limits each year.
If you are buying multiple units, the dedicated guide to conventional loans for 2- to 4-unit properties covers the additional distinctions.
A loan that exceeds the applicable conforming limit may instead fall into jumbo or other non-conforming financing.
How Many Financed Properties Can You Have?
Fannie Mae permits up to 10 financed properties when the new loan is for a second home or investment property and is underwritten through Desktop Underwriter.
The count includes financed 1- to 4-unit residential properties for which the borrower is personally obligated, including a financed principal residence.
A duplex, triplex or fourplex counts as one financed property rather than one property per unit.
Some real estate is excluded from the count, including commercial real estate, properties with more than four units, vacant land and certain properties financed through an LLC when the borrower is not personally obligated on the mortgage.
Fannie Mae's financed-property rules provide the full definition.
The 10-property limit is a Fannie Mae rule, not a universal mortgage-industry cap.
Other conventional, portfolio and non-QM programs can apply different standards.
Costs of a Conventional Investment Property Loan
Investment-property loans can cost more than otherwise similar primary-residence mortgages because occupancy is a pricing factor.
Both Fannie Mae and Freddie Mac apply investment-property pricing adjustments.
The amount of that adjustment depends partly on leverage.
As noted above, Fannie Mae's September 2026 matrix applies a 2.125% investment-property LLPA at 70.01% to 75% LTV, compared with 4.125% above 80% through 85% LTV.
A 1-unit property purchased with 15% down can also require private mortgage insurance because the loan is above 80% LTV.
Fannie Mae's mortgage insurance rules apply to eligible first-lien conventional loans in the 80.01% to 85% LTV range.
Other expenses can include appraisal fees, title charges, prepaid taxes and insurance, and other conventional loan closing costs.
Reserves are separate from these closing expenses.
Conventional Investment Property Payment Example
Consider a $350,000 duplex purchased as a non-owner-occupied investment property.
At the conventional 75% maximum LTV, the borrower would put 25% down, or $87,500, and finance $262,500.
Using a hypothetical 7% 30-year fixed rate strictly for illustration, principal and interest would be about $1,746 per month.
If taxes, insurance and other qualifying housing expenses added $650 per month, PITIA would be approximately $2,396.
If documented gross monthly rent were $3,200, Fannie Mae's 75% rental-income calculation would produce $2,400 in qualifying rent.
Subtracting the $2,396 PITIA would leave approximately $4 in positive monthly rental income before applying any other applicable underwriting rules.
This example illustrates why a property's apparent cash flow and its mortgage-underwriting calculation can look different.
You can use a conventional mortgage calculator to test different loan amounts, terms and rates.
When Conventional Financing May Not Fit
A conventional investment-property loan can work well when your documented income, debt, reserves and portfolio fit Fannie Mae or Freddie Mac requirements.
It becomes more difficult when the issue is not the property itself but the way your income or investment activity fits conventional underwriting.
For example, borrowers with substantial business write-offs may have less qualifying income on their tax returns than their actual cash flow suggests.
Investors approaching Fannie Mae's 10-financed-property limit may also need a program with different portfolio rules.
In those situations, non-QM investment property financing may use different qualification methods.
A conventional versus DSCR comparison focuses on the difference between personal-income underwriting and property-level cash flow.
The conventional versus bank statement comparison is more relevant when self-employment income is the issue.
Bottom Line
Conventional loans can finance 1- to 4-unit investment properties, but the rules are more restrictive than they are for a primary residence.
Current agency limits allow up to 85% LTV on a 1-unit purchase and 75% LTV on a 2- to 4-unit purchase.
Fannie Mae also generally requires six months of reserves for the subject investment property and can require additional reserves as your portfolio grows.
Credit, rental income, DTI and the number of financed properties all affect underwriting.
Pricing is also sensitive to both credit and LTV, which means the lowest allowable down payment is not necessarily the lowest-cost structure.
FAQ
Can You Use a Conventional Loan for an Investment Property?
Yes. Fannie Mae and Freddie Mac both permit conventional financing for eligible 1- to 4-unit investment properties.
The property must be classified as non-owner-occupied, and the loan must meet the applicable automated underwriting, LTV, income, asset and property requirements.
What Is the Minimum Down Payment for a Conventional Investment Property Loan?
Current Fannie Mae and Freddie Mac limits allow up to 85% LTV on a 1-unit investment-property purchase, which means at least 15% down.
A 2- to 4-unit investment property is limited to 75% LTV, requiring at least 25% down.
How Many Conventional Loans Can You Have at Once?
Fannie Mae permits up to 10 financed properties when the new loan is for a second home or investment property and is underwritten through Desktop Underwriter.
The calculation is based on financed properties rather than simply the number of mortgage accounts you have.
Do Conventional Investment Property Loans Require Mortgage Insurance?
They can. A 1-unit investment property can be financed up to 85% LTV, and conventional loans above 80% LTV can be subject to mortgage insurance requirements.
A purchase made with 20% or more down generally falls at or below the 80% LTV threshold.
What Credit Score Do You Need for a Conventional Investment Property Loan?
There is not a single universal minimum score for every Fannie Mae investment-property loan submitted through Desktop Underwriter.
The automated underwriting system evaluates credit along with factors such as LTV, DTI and reserves. Lenders can also set additional credit requirements beyond agency guidelines.
%20(1).jpg?quality=80&width=150)
.jpg?quality=80&width=800)
.jpg?quality=80&width=800)
.jpg?quality=80&width=800)
.jpg?quality=80&width=800)
.jpg?quality=80&width=800)
