Advanced Search

Investment Property Mortgages
Expand your mortgage offerings and cross-sell potential

Related Products

With investment property mortgages, you'll expand your mortgage business options, tapping an abundant market, while boosting cross-sell opportunities for your other financial products. Originate 1- to 4-unit investment property mortgages with many Freddie Mac mortgage options – most ARMs, balloon/reset mortgages, A-minus Mortgages and more – to enhance your origination strategies and customize mortgages to your borrower's individual needs and financial strategies.

Use Loan Prospector® to quickly and easily assess investment property mortgages, and leverage the advantages of cash sales and securities executions through our web-based selling system.

Product Features

FeatureRequirements

Property Type

  • 1- to 4-unit investment properties
  • Properties that meet the definition of Condominium Hotels per Guide Sections 42.3 and 42.10 are not eligible

Eligible Mortgage Products

  • 15-, 20-, 30-, and 40-year Fixed-rate Mortgages
  • 5- and 7-year Balloon/Reset Mortgages
  • Most ARMs
  • A-minus Mortgages (unless the borrower owns more than one financed investment property)

Transaction Type

  • Purchase
  • No cash-out refinance
  • Cash-out refinance

Maximum LTV Ratios

  • LTV ratios must comply with Single-Family Seller/Servicer Guide (Guide) Section 23.4

Down Payment or Closing Costs

  • Borrower Funds must not include gifts as described in Guide Section 26.2.

Eligibility/Underwriting

  • If the LTV ratio of the investment property mortgage is greater than 75 percent the mortgage must be:
    • a Loan Prospector Accept mortgage or an A-minus Mortgage, or  
    • Manually underwritten with a minimum Indicator Score of 720.
  • No more than four financed properties per borrower. Additional eligibility requirements apply for borrowers who own more than one investment property.
  • Borrower may not be affiliated in any way with the builder, developer or property seller.
  • Additional requirements apply for reserves, calculating monthly housing expense-to-income ratios, use of rental income in qualifying, rent loss insurance, and others.

Execution Options

  • Servicing-retained and Servicing-released fixed-rate Cash*
  • WAC ARM Cash
  • Fixed-rate Guarantor
  • WAC ARM Guarantor
  • MultiLender Swap

* See our selling system availability matrix [PDF 72K] for a list of specific mortgages eligible for sale best efforts or mandatory, servicing released.

Delivery Fees

  • Postsettlement delivery fees apply to investment property mortgages, including an Investment Property Mortgage delivery fee.
  • See Guide Exhibit 19 [PDF 494K] for details on these fees and all other applicable fees.

Special Delivery Requirements

  • Mortgages with Temporary Subsidy Buydowns are not eligible for delivery as investment property mortgages.
  • You must deliver all mortgage data required by Form 11 or Form 13SF, as applicable.

Single-Family Seller/Servicer Guide

  • Refer to Guide Section 22.22.1, Investment Property Mortgages.
  • Refer to Guide Section 37.14 for qualifying income requirements.

Download an Investment Property Mortgage fact sheet [PDF 102K] for more details.

Lender Benefits

Investment Property Mortgages help you:

  • Cross-sell other financial services you offer that appeal to customers who are seasoned investors.
  • Expand your mortgage product line and diversify your mortgage business – helping you meet any borrower need.

Benefits for Your Borrowers

Investment Property Mortgages help your borrowers:

  • Obtain flexible financing options for qualified investment-oriented borrowers.
  • Leverage a variety of mortgage product types to further customize home financing to individual cash flows and financial situations.

For More Information

Training Opportunities

Visit The Learning Center for live and recorded web conferences, access to classroom-style workshops and self-study tools – all designed to help you stay competitive, serve more borrowers and make it easier to do business with us.

The information in this document is not a replacement or substitute for information found in the Single-Family Seller/Servicer Guide and/or the terms of your Master Agreement and/or Master Commitment.


© 2008 Freddie Mac