FINANCING OPTIONS IN CA FOR A RENTAL

[Kristin Cooper]

I just completed my first rental home purchase as a co-borrower with my mom to get her into a home and out of a rental. In looking at homes for her I got the bug to buy more.  I have access to capital, I have excellent credit.  The quotes i have gotten for a rental home are in the 5% interest range with a high pt cost $8k.  Is this typical?  What are my other options?  

[Chris Mason]

Originally posted by @Kristin Cooper:

I just completed my first rental home purchase as a co-borrower with my mom to get her into a home and out of a rental. In looking at homes for her I got the bug to buy more.  I have access to capital, I have excellent credit.  The quotes i have gotten for a rental home are in the 5% interest range with a high pt cost $8k.  Is this typical?  What are my other options?  

 Instead of taking the Fannie Mae rental property "loan level pricing adjustments" in the form of a rate hit, you can pay them upfront as points/fees.

2.125% is the LLPA for investment property w/ 25% down.

4.125% is the LLPA for SFR investment property w/ 15% down.

1% is the LLPA for 2-4 unit. 

https://www.fanniemae.com/content/pricing/llpa-matrix.pdf