Common challenges
Many first-time investors assume they need landlord history. Most DSCR programs do not require it, though some price it in.
Programs that fit
DSCR Loans
A DSCR loan is an investment-property mortgage that qualifies you on the property’s rental income divided by its monthly payment (the debt service coverage ratio).
FHA Loans
An FHA loan is a government-insured mortgage that allows 3.5% down with a credit score of 580 or higher, or 10% down with a score from 500 to 579.
Fix and Flip Loans
A fix and flip loan is short-term (usually 12–18 months), interest-only financing that covers most of a distressed property’s purchase price and up to 100% of renovation costs, repaid when you sell or refinance.
Conventional Loans
A conventional loan is a mortgage not insured by the government that follows Fannie Mae or Freddie Mac guidelines.
Tips before you apply
- Run the DSCR before you offer: rent ÷ PITIA at 1.0 or better.
- Budget reserves; lenders and tenants both test them.
FAQ
What is the best mortgage for first-time investors?
It depends on your documentation and goal. The programs that most often fit are DSCR Loans, FHA Loans, Fix and Flip Loans, Conventional Loans.