Investment Property Mortgages
Investment property mortgages can expand mortgage business options and create opportunities to combine with other financial products.
These Freddie Mac mortgage options can help lenders originate 1- to 4-unit investment property mortgages to enhance origination strategies and customize mortgages to borrower's individual needs and financial strategies.
Investment Property Mortgages help you cross-sell other financial services you offer that appeal to customers who are seasoned investors and expand your mortgage product line and diversify your mortgage business – helping you meet any borrower need.
Who are Investment Property Mortgages for?
- Qualified borrowers who need flexible financing options for investment opportunities.
- People who need options to customize home financing for their individual cash flows and financial situations.
The information on this page is not part of, and is not a replacement or substitute for, the requirements found in the Freddie Mac Single-Family Seller/Servicer Guide and your other Purchase Documents.
Product Features
- Credit Fees
- Credit Fees apply to investment property mortgages, including an Investment Property Mortgage Credit Fee in Price.
- See Guide Exhibit 19 for details on these fees and all other applicable fees.
- Delivery Requirements
Refer to Guide Section 6302.8(b) for special delivery instructions for investment property mortgages.
- Down Payment or Closing Costs
Borrower Funds must not include gifts as described in Guide Section 5501.3 (b) (c).
- Eligibility/Underwriting
- All mortgages must meet the Loan Product Advisor mortgages risk class or the minimum Indicator Score for manually underwritten mortgages in Guide Exhibit 25.
- Maximum debt-to-income ratio of 45 percent for manually underwritten mortgages
- Borrower may not be affiliated with or related to the builder, developer or property seller for newly constructed homes.
- Additional requirements apply for reserves, calculating monthly housing expense-to-income ratios, use of rental income in qualifying, rent loss insurance, and others.
- See additional requirements in Guide Section 4201.16 for borrowers who own or are obligated on multiple 1- to 4-unit financed properties, including the subject property and the borrower’s primary residence.
- See additional special underwriting requirements in Guide Section 4201.16(b).
- Eligible Mortgage Products
- Fixed-rate mortgages
- Most ARMs
- Super conforming mortgages
- See additional requirements in Section 4201.16(a)
- Execution Options
- Servicing-retained and Servicing-released fixed-rate Cash*
- ARM Cash
- Fixed-rate Guarantor
- ARM Guarantor
- MultiLender Swap
* See our Loan Selling Advisor℠ availability matrix for a list of specific mortgages eligible for sale best efforts or mandatory, servicing released.
- Maximum LTV Ratios
LTV/TLTV/HTLTV ratios must comply with Single-Family Seller/Servicer Guide (Guide) Section 4203.4.
- Property Type/Eligible Properties
- 1- to 4-unit investment properties
- Properties in projects that meet the definition of Resort/Hotels per Guide Sections 5701.3 and 5701.10 are not eligible
- Transaction Type
- Purchase
- No cash-out refinance
- Cash-out refinance
Growing Your Business
From valuable training and networking events to advanced tools and applications that help you work smarter, Freddie Mac has the resources you need to expand into new markets and grow your revenues.
Resources for Borrowers
Reaching and educating borrowers – and helping them find the right mortgage – is essential for your business. Freddie Mac provides an array of materials you can share with your clients and business prospects.