Hi Everyone,

The mortgage guy I've worked with on two primary residence purchases is saying Fannie requires 25% down for an investment property. And the lender wants to see 3-6 months reserves which is understandable. Are there any local banks or credit unions that only require 20% down?

Thanks!

Mike

From my experience the answer is no. Depending on what state you buy in there are requirements. Like in Florida investment properties LTV must be 75%, but in Georgia it can be 80%. Some company's make it 65%. So for investment properties it will be between 65-75% in Florida. Not sure about your state. But it never hurts to call around and talk to the loan officer of the banks. Also, if it is too good to be true the loan officer most likely does not know, and it is too good to be true. I hear it all the time from investors this person told me 15% down and so and so on but then they come back to me haha because I told them the truth.

Typically you're looking at 75% LTV, or 70% if you're pulling cash out. Keep in mind however, most of the local NH banks I have spoken with are very conservative. They are hesitant on older buildings with the potential of lead paint (much more so than national lenders in my experience). They also have similar income requirements to Fannie/Freddie loans.

I tried to use some local banks but so far have been sticking with national lenders since the locals guys were making things too difficult.

@Zander Kempf thanks for the insight!

@Joseph A Gonzales thank you!

@Mike Street I'd reach out to Jeanne D'arc Credit Union and St. Mary's Bank and see if either of the can help you. I have not used either of them personally but know people that do a lot of business with them. 

@Jeremy Wirths thank you!!

Seeing as you're on the seacoast, check out Newburyport bank. They are loaning aggressively in the area as they are trying to expand here. I have done a HELOC with them in the past where they didn't even inspect the property, and they were willing to loan 75% on a cash-out refi on an investment property while other banks were only doing 65% or 75% but only on money invested and not just a straight cash-out. 

@James Smith will do! Thanks!

How many units is the property? If it's a multi, Conventional requires it to be 25% down. This is for all 50 states. If it's a single, you can buy for 15% down Conventional. 

There's a million different programs out there for slightly lower down payment requirements. What state are you looking to buy in?

NMLS#1869624

@Elise Marquette Hi Elise, looking to buy in NH. I recently heard about HomeStyle Renovation loan. A single family purchase would be my easiest way to buy using that program. I’m looking into it more and also reading Building Wealth One Home at a Time.

@Mike Street

You can get portfolio money at 80% ltv on an investor purchase with rates in the high 4's, low 5's on a 30 year fixed.  Just sayin'.:)

@Stephanie P. Thank you! I will look into that option.

There are bank/lenders that can do 20% down as opposed to 25% down. In this case you will notice that there is the possibility of the rate being higher due to a higher LTV.

The thing I would recommend is to make sure you look at when talking to lenders is if having less down will affect the rate. If you have to take a higher rate to get a lower down payment then you will want to run some numbers to see if it is worth it to have the higher rate vs having the extra 5% down. 

I hope this helps. 

@Michael Glist thanks, Michael!

One approach is to purchase the property using a hard money or private money loan. Rehab the property then refinance out at 75% of the appraised price. I like Working with Joanne at Primary Bank in Bedford. The bank was started by real estate investors.