What counts as an investment property?
An investment property is a home you buy to rent out or hold and won't live in. It can be a single-family house, a condo or a 2 to 4 unit building.
Two cases are financed differently. If you'll live in one unit of a 2 to 4 unit building, it's your primary home and owner-occupied programs can apply; see buying a 2 to 4 unit home. A vacation home you use yourself is a second home; see lake homes and second homes.
How is it different from a loan on your own home?
Lenders see a rental as more risk than a home you live in, so investment property loans usually come with a larger down payment, more cash reserves and different pricing than a primary home. Fannie Mae also doesn't allow gift funds for an investment property (gift funds guide), so the money to close has to be your own.
Tom shows you the actual numbers for your scenario side by side, so you can see the payment, Cash to close The total you bring to closing: your down payment plus closing costs, minus any deposits, credits or gifts. See the full glossary and reserves before you make an offer.
Can the rent help me qualify?
Yes. On a conventional loan, the property's rent can count toward your income. For a purchase, Fannie Mae uses the appraiser's market rent on Form 1007 (one unit) or Form 1025 (2 to 4 units), or a lease that transfers to you if the appraisal supports it. The lender counts 75% of the gross rent, which leaves room for vacancy and upkeep, then subtracts the property's full payment.
How the result is used depends on your experience as a landlord. With at least 12 months of property management history, positive net rent can count as income. Without it, the rent can offset the property's own payment but not add to your income. If the result is negative, it counts as a monthly debt.
How many financed properties can I have?
Fannie Mae allows up to 10 financed properties when the new loan is for a second home or an investment property and runs through its Desktop Underwriter system. The count includes:
- Each 1 to 4 unit property you're personally obligated on, counted by property, not by mortgage
- A 2 to 4 unit building as one property
- Your own home, if it has a mortgage
- Properties financed jointly, counted once for all borrowers
Commercial property, buildings with more than four units, vacant lots and timeshares don't count. More financed properties also means more required reserves. Past 10, a DSCR loan doesn't use the same count.
Conventional or DSCR: which fits?
| Conventional investment loan | DSCR loan | |
|---|---|---|
| How you qualify | Your income, tax returns and debts, with the rent counted | Mainly the property's rent compared with its payment |
| Who can borrow | You, as a person | You, or an LLC with some lenders |
| Financed property count | Up to 10 under Fannie Mae | Set by each lender |
| Often fits | Investors with steady, well-documented income | Self-employed investors, large write-offs or a growing portfolio |
Tom compares both for the same property, so you can see which one costs less and qualifies more easily.
What should New Hampshire investors watch for?
Property taxes are part of the payment the rent has to cover, and rates differ a lot from town to town. Each town page lists the current rate, and buying power by town compares them. Older cities such as Manchester, Nashua, Dover, Rochester and Somersworth have many 2 to 4 unit buildings, so check the age of the heating system, roof and wiring along with the rent.
Tom doesn't give legal or tax advice. Talk with an attorney and a tax advisor about how to hold the property and how rental income is taxed.
What should I have ready?
- Current leases, or the rent you expect
- Bank and retirement statements for your down payment, closing costs and reserves
- Your last two years of tax returns, with Schedule E if you already own rentals
- Mortgage statements for any properties you own
Tools for this topic: Investor loan options · Buying power by town
Sources
- Fannie Mae Selling Guide B2-2-03, Multiple Financed Properties for the Same Borrower (11/05/2025)
- Fannie Mae Selling Guide B3-3.8-02, Rental Income from the Subject Property (09/02/2026)
- Fannie Mae Selling Guide B3-3.8-01, General Rental Income Information (09/02/2026)
Checked October 2026. Limits and program rules change, so confirm current figures 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.