Invest
Investment property basics
Occupancy, reserves, and why a rental is underwritten like a business.
Investment property basics
Investment property
If you will not live in the property as your primary home, the loan is usually an investment file. Guidelines exist because a vacant rental is a different risk than the house you sleep in.
Bring the business facts: the property, the cash, the other mortgages, and how you will handle vacancies. A spreadsheet of optimism is not a lease.
01
Primary, second home, and investment are facts, not marketing labels.
02
Down payment, rates, and reserves are usually heavier on an investment file on purpose.
03
Documented leases and appraisal market rents may count. Hoped-for Airbnb nights generally do not.
04
Mis-stating occupancy is how files fail, and worse. Tell the truth about where you will live.
Occupancy
Where you will live is a signed fact. Second homes have their own rules. Investment is the rest. Do not try to stretch a primary-home program onto a rental.
Rent as income
What the investor will accept is documented. Leases, appraisal rent schedules, and history beat a projected calendar of short-term stays. Ask before you count it.
Plan for
More cash at close
Down payment and reserves are typically higher. That is the product, not a penalty.
Other properties on the application
Mortgages, taxes, insurance, and HOA on what you already own still count. Bring the statements.
Do not
Occupy on paper only
Saying you will live there when you will not is not a loophole. It is a problem.
Count unverified short-term rent
Ask what this investor will use. Do not close around a number nobody will underwrite.
From this guide
Common questions
Usually no. Investment occupancy typically requires more cash and more reserves. Your officer will map what may be available for this property. This page will not quote a percent.
Occupancy
A rental is underwritten like a business because it is one.
Tell the truth about where you will live. Then size the cash.
Ready when you are
The house is the point.
Whether you’re buying your first home, moving into your next one, refinancing, or exploring your options, we’re here to help you figure out the next step.