What credit score are lenders looking for..???

Question

What credit score is the lender looking for if you want to put 5-10% down on an investment property…???

Darrin Carey · Answer

VA and FHA are owner occupied only.
	
	For investors 20-25% down is normal, with a 640-660 score as a typical minimum, but it varies a lot. Less down always requires a higher score.

I've seen a couple experienced investors get 10% down with a 720+ score.

Waylon Themer · Answer

If you are looking for a long term fixed rate loan going into your project, you will need a minimum of 20% down to get said loan from a portfolio lender or a Fannie lender.  If you enter a project with hard money you can get in with as little as 0 to 10 percent down and sometimes you can refinance the full balance to a low fixed rate loan within 3 months depending on the situation.

James Mudd · Answer

Thank you Alex…is there a rule of thumb as to what percentage to put down.  I am sure the more the better.  Or maybe it is better to put down as little as possible to free up cash reserves for more rentals..?

Alex Noiz · Answer

If you want to put 5-10 % then you have to get FHA loan. Lenders requirements are usually vary, however, FHA minimum credit score requirement is 530 and it's when you want to get a house in the lower price category. I think that the most desirable score starts at 680 and up.

Aaron Montague · Answer

Foiled by geography!!

Alright, thanks @Darrin Carey

Darrin Carey · Answer

@Aaron Montague I know you would. However, they are strictly southwest Ohio portfolio lenders. If I find any National or in your areas, I will certainly let you know.

Aaron Montague · Answer

NACA is owner occupied only as well.  Plus you need to buy your first property with them.

@Darrin Carey I have a 720+ credit score and a fair amount of experience in the RE world.  Are these people you know at 10% talking to conventional banks?  If so, which banks are they?  I'd LOVE to chat with them.

James Mudd · Answer

Thank you Jean and Aaron…great info…!!!

Aaron Montague · Answer

Some more options to consider:

VA Loans (0% down) http://benefits.va.gov/homeloans/purchaseco_loan_limits.asp

NACA (very little down) https://www.naca.com/nacaWeb/index_main.aspx

FHA Loans (3.5%, but be wary of your PMI penalty, it's nasty) https://www.fha.com/

Homepath (the down payments don't change, but the construction loans is easy to wrap) http://homepath.com/

Jean Bolger · Answer

Hey James- I just saw your other post, so I will add some more info here. You will be able to get a loan as an owner occupant for a much lower down payment than you would for an investment property. That is why many investors advocate buying a small owner-occ multi (duplex up to quad) to start. You may be able to do as little as 3.5% down. Once you are looking for strictly investment properties, 20% is often the least a lender will accept. hope this helps!

What credit score are lenders looking for..???

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