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Down Payment Options for Investment Properties

We often get questions about investment purchases, so we wanted to revisit a few unique things that everyone should know about purchasing investment properties.

1.) Lenders require a 20% down payment for loan amounts up to $625,500. Many people come to us under the impression that the minimum down payment is 25%, but Freddie Mac will allow for down payments as low as 20%.

2.) Gift funds are not allowed for investment purchases. The entire down payment must be seasoned funds in the borrower’s own name.

3.) Borrowers can obtain seller credits on investment purchases, but that credit cannot exceed 2% of the purchase price.

4.) Borrowers do not need to own a primary residence before buying an investment property. Many borrowers mistakenly believe that they need to purchase a primary residence before they can qualify for an investment purchase.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646