Flexible Lenders that offer 5% down

14 Replies

Hi everyone,

I recently found out from a real estate agent that he found a flexible lender who does does 5% down at only 3.75 to 4% fixed 30-year with no PMI on purchases. They keep it in house and can provide a loan to anyone with strong income. It's not a federally backed loan, the bank holds it for their own profit.

I was wondering if anyone knew companies/lenders like this and could recommend a few names. 

Thank you in advance!


These are called commercial/portfolio loans but I can tell you now if you found one that will do 5% down with only 3.75-4% interest on a fixed 30 year term and no PMI then you should lock that up ASAP because it sounds too good to be true. I'd personally be very skeptical of any commercial/portfolio lender advertising such low rates/terms.

@Lakshmi Nikitha Duggirala real estate agents usually work with people buying their own PRIMARY homes.  So can you find a loan with 5% down...and even LESS...with those rates and terms?  Yes, as long as it is your primary home.

Bigger Pockets is designed about investment property strategies.  So you won't find those types of terms on investment property loans.  I hope this makes sense how I am describing this.  Hope this helps in some way at least.

@Andrew Postell Thanks for the response Andrew. I am aware that that's possible on primary home as I used a conventional 5% down with no PMI on my primary home. However, I was told some lenders out there that are willing to get creative.

Below is an email from the real estate agent I used on my primary home: 

"Btw I have a new lender from out of state I've been using. He does 5% down at only 3.75 to 4% fixed 30 with no pmi on purchases and doesn't check that you didn't refi or buy another property in last 6 months. It's a portfolio loan not conventional so has no income limit areas either. They keep it in house. I used him for a doctor client and he said can give loan to anyone with strong income. It's not a federally backed loan, the bank holds it for their own profit. You do need 6 months of reserves for mortgage+taxes+insurance but he counts retirement accounts as reserves."

Based on his email, I thought there's got to be lenders out there that are more flexible with their loans as long as they have other guarantees (high income and cash reserve). So my question was does anyone know of lenders who are flexible and offer 5% down (instead of 20% - 25%) on investment properties.

Thank you,


@Brian Garrett I hope you saw my response to @Andrew Postell . You are correct in that it is a commercial/portfolio loan. I was skeptical too as it seems too good to be true, but I guess the reason they offer it and it works is because their criteria is high-income producing individuals with 6 months of cash reserves to be able to pay the mortgage, property tax and insurance. If you're able to show such reserves, that essentially mitigates the lender's risk.

Have you come across any portfolio loan companies that offer good terms? 

@Lakshmi Nikitha Duggirala if those loan terms were correct for an investment property...I would just go work there.  That loan is better than some primary home loans.  I have seen some traditional banks/broker shops offer something like that when a person's stock account is really high.  They lend based on the balance of the account with them.  It's called a margin account.  So the stocks are the collateral.  That doesn't sound like what they are describing.  If you would like to share the company's name I will even reach out and verify.  I know what is said but there are are a lot of....let's just say "different" loans...that get misrepresented.  There are even loans that you will have 0% down for with investment properties...assuming you are buying and rehabbing below their lending threshold...but it certainly won't carry that type of a rate.  Those rates are most certainly primary home loan rates.

I agree with @Brian Garrett .  If you can get those terms on a commercial loan, I'd be finding out how I can sign on it yesterday.  I'd check things like pre-payment penalty on something like that.  Even swap rate numbers on 1mm+ loans aren't that low, even with 20% down.  Sounds too good to be true, but if it's not I'd be jumping on that.  

@Lakshmi Nikitha Duggirala

The lender is most likely a private lender. Someone who loves real estate investment, but doesn’t have time or knowledge to put deals together. If i was a Dr. and had large amounts of cash i would finance deals for a 5% return. Do the deal and if all works out you will know what the terms are as well as finding out who it is offering the deal.

Just make sure to have your attorney look over the paperwork.

Great job, you are making progress.

OR you could make some calls yourself to see if there is a lender who will do this in your area. Google banks or credit unions in your area and do some research yourself. Find some local banks that are not in every city. NOT Chase, B of A, Wells Fargo or any of the big ones. 

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