Becoming an investor

• VA: up to four units with no down payment and no monthly mortgage insurance, if you live in one unit and have full entitlement. For eligible veterans, this is often the strongest way to start.
• FHA: 3.5% down if you live in one unit. Three- and four-unit homes must pass a self-sufficiency test: 75% of the appraiser's rent for all units, including yours, must cover the full payment. You will also need three months of payments in reserve.
• Conventional: Fannie Mae allows 5% down on a 2 to 4 unit home you live in, with six months of payments in reserve.

Loan limits are higher for 2 to 4 units. An accessory unit counts too: Fannie Mae and FHA can count rent from one on a single-unit home, generally capped at 30% of your qualifying income.

Fannie Mae updated these rules in September 2026, required for applications from November 1, 2026:

• Rent comes from an appraiser's rent schedule or a market analysis with at least three comparable rentals. A lease is not used for the home you are leaving.
• The lender takes 75% of the rent, minus that home's full payment. A positive result can only offset that payment. A negative one counts as debt.
• With less than 12 months of landlord experience, you need six months of that home's payment in reserve, on top of other reserves.

FHA is stricter: rent from the home you are leaving counts only if you are moving more than 100 miles away. Without a landlord history, you also need at least 25% equity and a signed one-year lease. Many buyers simply qualify while carrying both payments.

• Down payment: at least 15% on a one-unit rental and 25% on two to four units, with a conventional loan.
• Seller credits: capped at 2% on investment property.
• Reserves: six months of the rental's payment, plus 2% of the balances on your other financed properties (4% with five or six, 6% with seven to ten). Your own home and the one you are buying do not count toward that total.
• Limit: up to 10 financed properties with automated approval.

Investment loans price higher than owner-occupied ones. Fannie Mae counts short-term rental income only on a legally permitted one-unit rental, at 50% of market rent, and only to offset its payment.

A DSCR loan qualifies on the property's rent compared with its full payment, not on your tax returns. It can fit when your returns show less income than you earn, when you have reached the conventional property limit, or when you want to own through an LLC.

The trade-offs include higher rates and costs, larger down payments, reserves, and often a prepayment penalty for the first few years. Each lender sets its own minimum ratio. Compare a DSCR offer with a conventional one before you choose.