Financing Options for Rental House

[Kirby Davis]

I see a lot of people posting about getting 30 year mortgages on rental properties. All of the banks I talk to consider these 'commercial' loans since it isn't YOUR home. They'll only do 20 year loans. Am I missing something? 

[Kevin Romines]

@Kirby Davis 

You can get 30 year fixed rate mortgages through a conventional loan, meaning Fannie Mae and Freddie Mac, up to 10 financed properties. These will be the loans with the best rates and terms. 

You can also get 30 year fixed loans on a portfolio loan, which allows you to finance in the name of an LLC with a personal guarantee. You can also do bank statement loans and investor cash flow loans, that only look at the rents received versus the PITI payment. No income or employment info is put on the loan app. on those loans. There generally isn't a max. number of financed properties limitation on these loans, like there is on Fannie and Freddie.

After that, you can also get 30 year fixed rates on a commercial loan. I'm not sure why a person would go to commercial unless there is a specific reason? You should be financing as many as you can through Fannie / Freddie and then go to portfolio after that?

I hope this helps?