Turned Down for Conventional Loan

[Ziyan Liu]

Hi all,

Newbie here. My husband and I have been educating ourselves about REI and are looking at houses in North Texas. We recently applied for a mortgage at a local bank and was turned down before they even looked at our credit score, income, etc. They told me that because I TOLD THEM that the loan is for an investment property, they cannot give me a conventional loan. Their Investment Loan's terms are: 7.5% interest, 15% down, up to 50K. They also told me that had I lied and said that it was a vacation home, then they may have considered our application. We are only looking to get a pre-approval letter and are considering using a conventional loan because we are looking for our first deal and want to be as safe (and familiar) as possible.

Are these bank-specific requirements or they are indeed requirements for conventional loans? Can you only use Conventional Loans to purchase your primary/secondary residence? I don't want to lie to a lender about the purpose of the investment. 

We only have 1 mortgage, our salaries will support (up to 150K of) a 2nd mortgage without any income from an investment. We both have close to 800 credit scores. But then again, the bank didn't even look at any of that. 

Thanks for your input in advance. I'll continue to educate myself about loans/lending in the meantime.

Yan