Fannie Mae Investment Property Guidelines 2026: The Complete Rulebook

By Mortgage-Info Editorial Team••11 min read

Buying a rental? Fannie Mae's rules decide your down payment, how much rent counts as income, and the fees that get layered on top. 15% down minimum, 75% rental counting, 10-property cap — here's every rule in plain English, plus the 2026 workarounds investors actually use.

Quick Picks — Investor Financing Paths

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  • Kiavi — built for investors

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  • Conventional still cheapest

    If you qualify under Fannie rules, rates are lowest — compare

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DSCR Alternative: No Income Docs

If Fannie's rules box you out — DSCR loans qualify on rent alone. Rates from 6.75%.

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📋 Fannie Investment Property Rules — October 2026

RuleRequirementNotesOptions
Down payment15% (1-unit) / 25% (2-4 unit)PMI available at 15% on 1-unit onlyCompare →
Credit score minimum620 (price-adjusted below 740)LLPA hits are steep — 760+ saves ~1.5% in feesDSCR →
DTI maximum45% (50% with DU approval)Rental income counts at 75% of leaseCompare →
Reserves required6 months PITIAPer property for 1-4 financed, up to 8 on 7-10DSCR →
Max financed properties10 (incl. primary)Props 5-10 need 720+ credit, 25% down, 6 mo reservesCompare →
Rental income counting75% of lease or Schedule ENew build = lease × 75% (or appraisal Form 1007)DSCR →
Rate premium vs primary+0.50-0.75% + LLPAsInvestment LLPAs: 1.75-3.75% of loan amountCompare →
Cash-out refi70% LTV maxvs 80% on primary. 6-mo seasoningDSCR →

🧮 Real Math: $300K Rental Purchase

  • 15% down: $45,000 + closing ~$8,000 + 6mo reserves ~$9,000 = $62K cash needed
  • Rate: 6.84% market + ~0.65% investment premium + ~2.25% LLPA at 740 credit
  • Rent $2,200/mo: counts as $1,650 qualifying income (75%)
  • P&I on $255K: ~$1,790/mo → property cash-flows ~$410/mo after taxes/insurance
  • 💡 Break-even on cash invested: ~12-15 years from cash flow alone — or ~6 years at 4% appreciation.

Property 5-10 or Self-Employed?

DSCR loans bypass DTI, income docs, and the 10-property cap. The rent is the qualification.

See Kiavi DSCR Terms →

❓ Fannie Investment Property FAQs

What are Fannie Mae investment property down payment rules in 2026?
1-unit investment property: 15% minimum (with PMI). 2-4 unit: 25% minimum, no PMI exception. Second homes (not rented): 10% down allowed — but if you rent it, it's an investment property and rules tighten. On a $350K rental: $52,500 down at 15%, or $87,500 at 25%.Compare investment lenders →
How does Fannie count rental income from a property I'm buying?
For a purchase: 75% of the signed lease (or appraiser's market rent estimate on Form 1007) counts toward qualifying income. For existing rentals you own: 75% of lease OR the average of Schedule E from tax returns — whichever you can document. A $2,200/mo lease = $1,650/mo qualifying income.See DSCR alternative →
What credit score do I need for an investment property mortgage?
Fannie minimum is 620 — but the Loan-Level Price Adjustments (LLPAs) are brutal below 740. At 620-679 with 25% down: ~3.75% in upfront fees. At 740+: ~2.00%. At 780: ~1.75%. On a $300K loan, the difference between 620 and 760 credit = ~$5,000+ in fees. Fix credit first if under 720.Compare investment lenders →
How many investment properties can I finance with Fannie?
Maximum 10 financed properties total (including your primary). Properties 5-10 trigger stricter rules: 720 credit minimum, 25% down on purchases, 6 months reserves on ALL financed properties. Beyond 10: portfolio/DSCR loans only.See DSCR alternative →
Can I use rental income on a new build purchase (FNMA)?
Yes — this is a common 2026 strategy. Fannie counts 75% of a signed lease. No lease yet? The appraiser completes Form 1007 (Single-Family Comparable Rent Schedule) and 75% of the market rent estimate counts. For new construction specifically, the lease must be executed before closing OR the 1007 appraisal route works.Compare investment lenders →
What's the difference between a second home and investment property to Fannie?
Second home: must be 50+ miles from primary, occupied by you part-year, NO rental income counted on purchase (though occasional rental is allowed). Investment: any distance, rental income counts, but requires 15-25% down and carries rate/fee premiums. Misclassifying is occupancy fraud — lenders audit.See DSCR alternative →

Conventional or DSCR — Pick Your Path

Conventional wins on rate if you qualify cleanly. DSCR wins on flexibility. Compare both free.

Compare Both →DSCR Quotes →

Related Guides

→ Fannie Rental Income Rules→ Best Investment Lenders 2026→ DSCR Loan Complete Guide→ 2026 Loan Limits by County

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