Rental Property Loans
Cash-Out. Refinance. Purchase.
Our Rental Property Loan Program
Our Rental360 Loan Program is perfect for professional investors looking to grow their portfolio of single-family rental properties.
- Full 30 year terms, no balloons
- Streamlined qualification process emphasizing DSCR rather than personal income
- No tax returns required; No DTI calculations
- Up to 75% LTVs
- Simple, haggle-free pricing you can depend on
- Protect your identity and other assets by borrowing in a corporate entity
Partner with a Lender That’s Highly Specialized in Non-QM Loans
Laser-focus: REO Lending’s laser-like focus and rental loan expertise simply cannot be matched. Would you go to a foot doctor for a headache? Or an employment attorney for a divorce? There is something to be said about going to a specialist for the specialty you need.
Eliminating cross-default provisions: Choosing a specialized rental lender instead of financing all of your investment properties, such as fix-and-flips, through one lender could avoid cross-default provisions. Essentially, through a cross-default provision, if a borrow fails to pay interest or principal on time for one loan, the lender has the right to default the borrower on all of their loans. Fix-and-flips are risky investments even for the best investors, so it is always a good practice to keep your rentals elsewhere.
Why Our Rental360 Loan Program is the Best in the Country
The REO Lending Rental360 Loan Program is specifically designed for investors looking to grow their portfolios of single-family (1-4 unit) rental properties. We have the most experience in the industry and have the customization investors need for their investment strategies. Rental360 investors can choose their:
• Rate Structure: Pick from a 5/1 ARM, 7/1 ARM, or 30-Yr Fixed. The 5/1 ARM and 7/1 ARMs are ideal for transitional rentals, while the 30-yr fixed is a more permanent financing option.
• Origination Fee: Our standard origination fee is 1%, yet borrowers have the option to pay more or fewer points to either buy down their rates or pay less cash upfront.
• Prepayment Penalty: A prepayment penalty is a contractual clause that states the borrower is going to pay the lender an additional fee if the borrower pays off the loan early. Our standard prepayment penalty is a 5-year structure, but if the borrower wants to pay the loan off sooner, they can opt for one of our 3-year structures.
While most lenders are reselling someone else’s loan product, REO Lending is one of very few direct lenders to rental investors. By cutting out the middlemen (yes, men!) you get a better loan product and smoother borrowing experience. For Instance, we have serviced many loans in Jacksonville Florida, Wisconsin, Dells and Lead, SD
Debt-Service Coverage Ratio (DSCR)
Rather than look at the personal income of our investors, REO looks at the monthly cash flow generated by the property compared to the debt. We do this using a metric called DSCR is calculated by dividing the monthly rent by the monthly principal, interest, taxes, insurance and association dues (PITIA). A DSCR of 1 indicates the investor is breaking even, and anything above a 1.2 is considered solid. Many investors that own multiple mortgaged rental properties have too much “debt” to qualify for traditional financing, so using DSCR rather than DTI enables them to acquire more rentals.
Rental Loan FAQs
What types of loans can be used for an SFR investment property?
Can you get a 30-year loan on an investment property?
What's a successful ROI on a rental property?
Our rental loan program is intended for SFRs (single-family residences), which refer to properties with 1-4 units. When it comes to financing a single-family home, there are essentially two giant buckets: government-sponsored loans and private label loans. These can further be broken down into consumer/owner-occupier loans and business purpose/investor loans.
We also offer loans specially designed for short-term rentals (e.g. vacation properties) and commercial properties (e.g. multi-family and mixed-use properties).
Yes, REO Lending offers 30-year loans with fixed rates, no balloons, and the option to buy your rate down.
The key to a successful return on your investment property is to bring in more money than you owe. Ideally, the DSCR or Debt-Service Income Ratio would be 1.2 or greater, which indicates that the monthly rent covers all associated expenses and then some.