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Investment Property Mortgages

Expand your mortgage offerings and cross-sell potential

With investment property mortgages, you'll expand your mortgage business options 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, 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 in projects that meet the definition of Resort/Hotels per Guide Sections 42.3 and 42.10 are not eligible
Eligible Mortgage Products
  • 15-, 20-, and 30-year fixed-rate mortgages
  • Most ARMs
  • A-minus mortgages (unless the borrower owns more than one financed investment property)
  • Super conforming mortgages
Transaction Type
  • Purchase
  • No cash-out refinance
  • Cash-out refinance
Maximum LTV Ratios 
  • LTV/TLTV/HTLTV ratios must comply with Single-Family Seller/Servicer Guide (Guide) Section 23.4.1
  • See Guide Chapter L33.3 for maximum LTV/HTLTV/TLTV ratio requirements for super conforming mortgages
Down Payment or Closing Costs
  • Borrower Funds must not include gifts as described in Guide Section 26.2.
Eligibility/Underwriting
  • Loan Prospector (Accept or an A-minus) or manually underwritten mortgages
  • Minimum Indicator Score of 620 unless otherwise specified in the Guide (Loan Prospector A-minus mortgages exempt)
  • All mortgages must meet the risk class and/or minimum Indicator Score requirements in Guide Exhibit 25A.
  • Maximum debt-to-income ratio of 45 percent for manually underwritten mortgages
  • Additional eligibility requirements apply for borrowers who own more than one financed investment property. See Guide Section 22.22.1(c).
  • Borrower may not be affiliated with or related to the builder, developer or property seller for newly constructed homes.
  • Additional requirements apply for reserves, calculating monthly housing expense-to-income ratios, use of rental income in qualifying, rent loss insurance, and others.
  • If rental income is being used to qualify the borrower:
    • The borrower must demonstrate at least a two-year history of managing 1- to 4-unit investment properties.
    • Aggregate negative rental income from all rental properties must be treated as an obligation and included in the debt-to-income ratio.
    • The borrower must have rent loss insurance coverage on the investment property for at least six months gross monthly rent.
  • Purchase of a new primary residence when the sale of the existing primary residence has not closed or is converting to a second home or investment property must meet the requirements in Guide Section 37.16.2.
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 for a list of specific mortgages eligible for sale best efforts or mandatory, servicing released.

Delivery Requirements
  • Refer to Guide Section 17.11(b) for special delivery instructions for investment property mortgages.
Delivery Fees
  • Postsettlement delivery fees apply to investment property mortgages, including an Investment Property Mortgage delivery fee.
  • See Guide Exhibit 19 for details on these fees and all other applicable fees.
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.

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

  • Call your Freddie Mac representative.

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.

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