Short answer
On a conventional loan run through Fannie Mae's Desktop Underwriter, an investment property needs six months of reserves for its own payment. If you own other financed properties, you also need reserves equal to a percentage of what you owe on them: 2% with one to four, 4% with five or six, and 6% with seven to ten. DSCR lenders set their own reserve rules.
What counts as reserves?
Reserves are the money you'll still have after closing, measured in months of the new home's full payment: principal, interest, taxes, insurance and any association dues. Checking and savings count, and so can vested retirement funds and investments.
How much for the rental itself?
Fannie Mae's Desktop Underwriter requires six months of reserves for an investment property, a 2 to 4 unit home you'll live in, or a cash-out refinance with higher debt ratios. A second home needs two months. Desktop Underwriter can ask for more based on the rest of your file.
What about the properties I already own?
If you have other financed properties, including your own home, Fannie Mae adds reserves based on the combined unpaid balance of those mortgages:
- 2% of the balance with one to four financed properties
- 4% with five or six
- 6% with seven to ten (Desktop Underwriter only)
The 10-property limit post explains what counts as a financed property.
Do DSCR loans work the same way?
No. DSCR lenders set their own reserve rules, and they vary. Tom compares them side by side so you know the cash you'll need before you make an offer.
Sources
Checked October 28, 2026. Rules and dates change, so confirm current details before you rely on them.
General information only, not tax or legal advice. Program availability, eligibility and terms vary by lender and are subject to change and to underwriting approval. Not a commitment to lend.