Best LTV on investment property loans

Chattanooga, Tennessee
Private Lending & Conventional Mortgage Advice
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Best LTV on investment property loans

Remi Nagle
Member since 2022 · 1 post · 1 vote

Hello,

I am looking to buy an investment property using a conventional loan and I was wondering if anyone here knew of any banks in Tennessee (or any bank really) that could get me financing for a rental property at 85% LTV in Chattanooga. I understand this is a high bar to ask on an investment loan but I have managed to find some lenders in my home state in Washington who have been able to do so. One more thing. In addition to only needing a 15% down payment, I would like to find a lender that can also count the rent income from the rooms I am renting in my primary residence. This is the only way I can free up enough DTI to make the next purchase.

Any tips would be greatly appreciated.

Thanks,

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Robin SimonBusiness Member
Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
4h

Yes, there are now some new "hybrid DSCR" programs that are pretty much specifically designed for situations like this - get to 15% down while using some personal income to supplement the DSCR ratio qualification

[email protected]
Harpoon Capital514 Reviews
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  • Kevin Luttrell
    Lender · Orange County, CA · Member since 2019 · 299 posts · 255 votes
    4y

    @Remi Nagle Try First Community Bank: https://fcbanktn.bank/casual-i...

    Not sure if they lend in Chattanooga (they're in east TN) but they do lend up to 85% LTV for rentals in certain cases. Good luck.

    0Reply
  • Kyle DeutschmannPro Member
    Investor · Washington, DC · Member since 2017 · 428 posts · 205 votes
    4y

    @Remi Nagle hey Remi, we have a program that goes up to 85% LTV on 1 unit investment properties, but unlikely you'll be able to use the room rental income if it's your primary residence unfortunately unless it's an actual multi family property. The alternative would be buying a property using a DSCR loan, but you'd like need a bigger down payment for that.

    [email protected]
    0Reply
  • Vanessa Ng
    Lender · Nationwide Lender (48 states) · Member since 2022 · 43 posts · 16 votes
    4y
    Hi there,

    For a conforming conventional loan, the minimum down is 15% for an investment property. Boarder income is generally not expected, unless :

    When a borrower with disabilities receives rental income from a live-in
    personal assistant, whether or not that individual is a relative of the
    borrower, the rental payments can be considered as acceptable stable
    income in an amount up to 30% of the total gross income that is used to
    qualify the borrower for the mortgage loan. Personal assistants
    typically are paid by Medicaid Waiver funds and include room and board,
    from which rental payments are made to the borrower.

    OR meet Home Ready Guidelines --- Fannie Mae's Home Ready Guidelines does have income limits

    0Reply
  • Adam Summerer
    Lender · Franklin, TN · Member since 2026 · 18 posts · 2 votes
    7h

    Agency conventional on a pure investment is usually capped around 85% LTV on 1-unit, so you're asking for the top of that box — some local portfolio shops and Non-QM/DSCR lenders will still talk ~80–85% purchase when credit and rent coverage are clean. Boarder/room rent on your primary almost never helps the investment DTI unless it's a true accessory unit under HomeReady-style rules. More common fork: keep chasing 15% down conventional if DTI clears, or switch to rent-based (DSCR) underwriting and size the down payment to the DSCR/LTV grid instead of fighting room-rent income.

    0Reply
  • Sasha MohammedPro Member
    Lender · Costa Mesa, CA · Member since 2018 · 337 posts · 245 votes
    4h

    Does the investment property by chance need any renovations? even cosmetic renovations?

    maybe a better strategy for this would be to go with a rehab loan. F&F lenders would finance for up to 90% on the acquisition, and up to 100% of the rehab, and they will NOT look at your DTI.

    The caveat to this is that you would not be able to stay in that loan long term, it typically balloons after 6 months or a year, so a refinance into a DSCR at that point would be my suggestion.

    You will pay more in transactional cost this way - you're facilitating 2 transactions, purchase and refinance, but you've freed up 5% of your down payment by going 90% on purchase, and skipped the DTI qualification if your refi is a DSCR refi - hopefully with added value from your renovations.

    This is not the right strategy for everyone, nor every property; but some food for thought if the top priority is putting less down to acquire, and circumventing a 'boarder income' situation against conventional guidelines.

    [email protected]949-351-1338
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  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    4h

    Yes, there are now some new "hybrid DSCR" programs that are pretty much specifically designed for situations like this - get to 15% down while using some personal income to supplement the DSCR ratio qualification

    [email protected]
    Harpoon Capital514 Reviews
    WebsiteView Page
    1Reply
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