What’s an investment property loan?

Investment property loans are used for the purchase of second homes and investment properties, including one- to four-unit residential properties and vacation properties. U.S. Bank offers a variety of investment property loans to suit nearly every need. As an option, if you currently own a home you may be able to use your current home equity to finance buying additional property. To learn more about real estate investment loans and current investment property loan rates, contact a mortgage loan officer.

Investment property loan requirements and qualifications

Credit score

Generally, the higher your credit score, the better your chances of qualifying with the best possible rate. You can strengthen your ability to qualify by taking steps to build and maintain a solid credit history and score prior to applying for a loan. If you’re a current U.S. Bank customer, you can monitor your credit for free with our tool.

Down payment

An investment property down payment is typically higher than that of a primary residence. A down payment of 20% or more does have advantages though. When you put more money down, you're taking some of the risk away from the lender – proof that you’re invested in the purchase and a sign that you’re committed to making all your mortgage payments. In return, the lender may offer you a lower mortgage interest rate.

Cash reserves

You should have assets readily available to cover six to 12 months of mortgage payments. The amount of reserves necessary can vary by loan type but may be a bit stricter for investment property loans since they represent an added risk to the lender. Cash reserves show the lender that you’ll have the ability to keep up with your mortgage payments, even if something happens to your regular paycheck.

Do your homework before buying investment property.

Investing in real estate is like any kind of investment — it’s wise to do your homework and assess both the benefits and the risks involved. If you’re considering a rental property, decide which characteristics are most important to you for the property, such as type, location, size and amenities. Research the property thoroughly to determine if the investment will be profitable. If you’re considering a second home or vacation property, decide which factors are most important to you, whether it be a particular climate, the distance to the activities you enjoy or proximity to nearby towns and major cities. Contact a U.S. Bank mortgage loan officer to learn more about your mortgage options for an investment property loan.

Start of disclosure content

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rates and program terms are subject to change without notice. Mortgage, home equity and credit products are offered by U.S. Bank National Association. Deposit products are offered by U.S. Bank National Association. Member FDIC.