Any Georgia lenders with sub 20% down loans for buy and holds?

[Robert E Bogino]

I feel like this is a thing of the past but I will ask anyway.  I have completed my first 2 deals with conventional bank loans at 20% down and I have excellent credit so I get pretty good interest rates.  Has anyone experienced lenders in GA that will do 10-15% down for buy and holds? Also, if anyone has dealt with GA lenders on 50k and below properties?  Most banks I have talked to do not want to do mortgages on sub 50k.

[Andrew Postell]

@Robert E Bogino you have 1 solution for sure here and one "maybe".  The 1 solution for sure is that conventional loans allow 15% down when you buy an investment property.  Conventional loans are the loans with the best terms and rates and they are governed by Fannie Mae & Freddie Mac (if you recognize those names).  So a traditional investment property loan you can buy with 15% down.  A couple of things to know about this:

1. When buying with a conventional loan and using 15% down you will have PMI (ask away if you aren't familiar with what PMI is)
2. The banks don't have to follow this guideline.  This might sound strange but the bank can actually change the requirements for a conventional loan.  They can be more strict but not less strict.  So if the bank wants to they can require 20% down minimum.  I've seen some that require 25% down minimum.  But they CANNOT allow 10% down because that would be less strict than the Fannie/Freddie guidelines.  And it doesn't have to be just the downpayment; it can be credit scores, rental history, and even LOAN AMOUNT.  Fannie/Freddi do not have minimum loan amounts...but the bank can say "Well, we aren't lending lower than $75k".  I hope this is making sense on what I am describing.  This is one of the reasons why there are so many conflicting stories when it comes to borrowing money.  These extra rules are called "overlays".  So your quest is to find a bank with as little overlays as possible.

Now, your "Maybe" solution is to find a "portfolio" loan.  Or it's sometimes referred to as a commercial loan.  A portfolio loan is a loan that is not governed by Fannie Mae or Freddie Mac.  Instead it is governed by the bank itself.  It comes from their own PORTFOLIO of money.  So there MIGHT be a bank that allows a lower down payment than 20% on their portfolio money.  But you'll pay for it.  Meaning the rate might be higher, the rate might be adjustable, or the term might be a 15 year term making your monthly payment higher....and sometimes portfolio loans have all three!  Yikes!