Rental Property Loans
Long-term financing for single-family rentals, duplexes, and small multi-family properties. Competitive rates with 20–25% down.
Start Here, It's Free
Step 1 of 9
How Rental Property Loans Work in Michigan
Rental property loans are available to investors purchasing single-family homes, condos, and small multi-unit properties (2-4 units) as investment properties. These programs are available in Michigan and most other states — if you are investing outside Michigan, reach out to confirm availability in your specific state. The qualifying process differs from a primary residence purchase in several important ways, primarily around down payment, credit requirements, and how rental income is counted.
Qualifying with Rental Income
For a property you are purchasing as a rental, lenders typically allow you to use projected rental income to offset the mortgage payment in your debt-to-income calculation. The amount of rental income that can be counted varies by loan program — conventional investment property loans typically allow 75% of the market rent (as determined by an appraiser) to be counted as income. DSCR (Debt Service Coverage Ratio) loans go further, qualifying the loan entirely based on the property's rental income rather than your personal income, which is particularly useful for investors with complex tax returns or multiple properties.
Down Payment Requirements
Investment property loans require a larger down payment than primary residence loans. Conventional investment property loans typically require a minimum of 15% down for a single-family rental, and 25% for 2-4 unit investment properties. DSCR loans generally require 20-25% down. The larger down payment requirement reflects the higher risk profile of investment properties — lenders know that investors are more likely to walk away from a rental than from their primary residence in a financial hardship.
Cash-Out on Existing Rentals
If you already own rental properties in Michigan, a cash-out refinance can be a powerful tool for accessing equity to fund additional acquisitions. Conventional cash-out refinances on investment properties allow up to 75% LTV (compared to 80% for primary residences). DSCR cash-out refinances are also available and do not require personal income verification, making them ideal for investors whose personal DTI is stretched across multiple properties.
Frequently Asked Questions
What credit score do I need for a rental property loan?
Conventional investment property loans typically require a minimum credit score of 680-700. DSCR loans may be available at lower scores depending on the lender. Your loan officer will identify the programs available for your credit profile.
Can I use rental income to qualify?
Yes. Conventional loans allow 75% of market rent to offset the mortgage payment in your DTI. DSCR loans qualify the loan entirely based on the property's rental income, without requiring personal income documentation.
How much down payment is required for a rental property loan?
Conventional investment property loans require a minimum of 15% down for single-family rentals and 25% for 2-4 unit properties. DSCR loans typically require 20-25% down.
What is DSCR and how does it affect my loan?
DSCR (Debt Service Coverage Ratio) measures the property's rental income relative to its mortgage payment. A DSCR of 1.0 means the rent exactly covers the mortgage. Most DSCR lenders require a minimum ratio of 1.0 to 1.25. DSCR loans do not require personal income verification, making them ideal for investors with complex tax situations.
Are rental property loans available outside Michigan?
Yes — our investor loan programs are available in Michigan and most other states. If you are investing in a specific state and are unsure about availability, please reach out and we will confirm.
Why Michigan Mortgage Solutions?
We've been helping Michigan families achieve homeownership since 1999. Here's what sets us apart.
Practice Purchase™ System
Our exclusive process lets you simulate your mortgage before you commit, no risk, no hard credit pull.
Expert Team of 5 Loan Officers
From first-time buyers to seasoned investors, our specialists match you with the right expert for your situation.
Same-Day Approvals Available
Get a verified pre-approval letter the same day in many cases, so you can make competitive offers with confidence.
Access to 50+ Lenders
As a broker, we shop your loan across dozens of lenders to find the best rate and terms, not just one bank's products.
Specialty & Hard-to-Place Loans
Self-employed? Low credit? High DTI? ITIN? We have programs for borrowers other lenders turn away.
Step-by-Step Guidance
We guide you from first conversation to closing day, no guesswork, no surprises, just clear communication.
What Our Clients Are Saying
275+ five-star reviews from homebuyers, homeowners, and investors across Michigan.
"Trevor and the team at Michigan Mortgage Solutions made buying our first home so easy. They walked us through every step and got us a rate we couldn't believe. Highly recommend!"
"I was self-employed and thought getting a mortgage would be a nightmare. Jason found us a bank statement loan that worked perfectly. Closed in 28 days!"
Ready to Get Started?
Get your free mortgage consultation today. No hard credit pull. No obligation.