Rental Property Loans

Grow Your Rental Property Portfolio Without Worrying About The Financing

Provident Commercial Capital has created the industry’s most versatile suite of rental property loans. We understand that rental property investors have all kinds of unique strategies that they employ to reach their goals. That’s why we are committed to helping clients purchase and refinance properties efficiently and effectively by providing the right loan product for their individualized situations. Our rental property loans offer the perfect consolidation tool as your portfolio grows!

How Rental Property Loans Work

Be ready to make a larger down payment than with a traditional mortgage. It’s important to remember that rental property loans still come fully amortized over 30 years, so you don’t need to worry about fluctuating payments. Knowing this fact beforehand allows for realistic expectations in your rental investment strategy and makes you better positioned to create an accurate pro forma cash flow analysis.

Lenders view rental property loans as riskier than mortgages for owner-occupied homes. That’s why interest rates are higher; they expect a more significant down payment. Banks know that if things don’t go according to plan, an investor-borrower is likely to default on their rental property loan more quickly – and it’s not uncommon for them to give the keys back to the lender.

Many rental property loans come with slightly more restrictive terms than other types of mortgages. But, as a real estate investor, this can work in your favor! Not only do rental property loans often have lower interest rates, but you can also expense the entire loan payment as a tax deduction. Furthermore, you’ll need to put down a sizable down payment, creating an even lower loan-to-value (LTV) ratio – so your mortgage debt service payments are minimized, and your cash flow is increased.

Rental Property Loans

  • Property Types:Single-family, condos, townhomes, multifamily, multi-property portfolio loans
  • Loan Amount:$250k - $25M
  • Base Rate:Rates will very, contact for pricing
  • Transaction Types:Purchase, Rehab, Rate/ Term Refinance, Cash-out Refinance
  • Max Purchase / Rate & Term Refinance LTV80%
  • Max Cash Out LTV75%
  • Minimum DSCR1.20
  • Term Lengths:30 Years
  • Demographic:Nationwide
  • Minimum FICO:680
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Fast & Dependable Rental Property Loans from Provident

Provident Commercial Capital is an excellent choice for rental property loans. As a leading provider, we specialize in rental properties, including vacation rental investments, and provide an ideal financing solution for entrepreneurs when traditional lenders can't meet their needs. Provident does not require personal income verification when considering an application; rather, rental income and borrower credit are used as the criteria to recommend or deny a loan. This makes it possible for self-employed individuals or investors interested in building a portfolio of rental properties to receive the funding they need.

Rental Loans Vs Conventional Loans: The Key Advantages

No Personal Debt to Income

Provident offers rental property loans that don't include personal debt-to-income ratios as part of the loan criteria, allowing you more freedom when investing. One of our strategies is to use in-place or market rents when estimating the cash flow level of the property, making it easier for applicants to secure loans.

Lower Documentation Requirements

Rental property investors may not have to provide personal tax returns or employment verification. This makes getting property financing more accessible and faster than ever, allowing investors to focus more on their business objectives and less on paperwork.

Legal Safeguard

Any rental properties you invest in can be protected from potential liabilities. Provident understands this and offers financing investment properties through an LLC and corporation. Through a business, rental investments are shielded from personal liabilities.

Scale Your Rental Portfolio

You can comfortably expand your rental portfolio without worrying about limits. With proven experience and payment performance, you can confidently grow your rental portfolio without hitting a plateau. Provident will help you create and maintain an ever-growing rental portfolio with ease.

Eliminate Cross-Default Provisions

You may need help if you choose to finance your rental properties - such as fix and flip projects - through just one lender. Cross-default provisions mean that if you fail to pay on time for one loan, the lender has the right to default you on all your loans. Considering rental investments involve risk, we wisely spread the loans around and work with a specialized lender to ensure that cross-default provisions don't come back to bite you.

Short-Term Vacation Rentals

Provident only works with experienced lenders who understand the nuances of common-sense underwriting. We have the right loan partners to ensure your short-term rentals are aligned with long-term business goals.

Rental Property Loan FAQs

Deciding which rental property loan is best for you depends on your circumstances. An agency or bank loan requires a steady personal income, good credit, solid cash reserves, an established track record, and only a plan to own one or two rental properties. But suppose you are self-employed or looking to expand your rental property portfolio. In that case, an alternative lender like Provident Commercial Capital can provide the solution that is just right for you.

Securing rental property loans can depend on the type of loan you choose. Bank loans will generally be more challenging to get approval for, while loans from alternative lenders, like Provident, are usually more accessible. On average, it takes around 30 days to close a rental property loan, but this depends on your circumstance and the loan requirements. If you’re looking for a reliable lender with minimal paperwork and processes, Provident will be your best bet!

Putting less than 20% down on rental property may be possible, but loans with a higher LTV (Loan-to-Value) ratio may have higher interest rates and other fees. You can still get a decent loan with such terms – it just requires more requirements and diligence when acquiring rental property financing. The more an investor can put down as a deposit on a rental property, the better because it opens up your options for lenders and lowers the interest you’ll pay in the long run. It’s worth reviewing Provident’s rental property loan choices that offer lower LTV ratios, so there will be little disruption to your financial goals.

For rental property loans, the conventional wisdom is that a credit score of 720 or above is necessary for approval. However, if yours falls slightly below that benchmark – some alternative lenders will consider rental loan applications from borrowers with a FICO score of 680. Provident has access to rental property lenders you otherwise wouldn’t have available with a 680 credit score. This can be especially beneficial for those just starting in the investment property market who still need a long-standing credit history and established finances that other lenders require for financing application approval.

When considering rental property loans, it’s important to note that the interest rates and fees associated with them are typically higher than what you’d get with an owner-occupier mortgage. Exactly how high varies widely and can depend on everything from your credit score to other market influences—but overall, you should plan for around 100-400 bps (basis points) more on rental property loans. Of course, Provident has partnerships with lenders to get the best rates for your property loan.

A rental property loan differs from a hard money loan in many ways. Hard money loans are typically short-term, often ranging from 12 to 36 months, while rental loans generally have much longer terms. When qualifying for rental property loans, you’ll need evidence of an income source that can prove the ability to repay the loan. This could be either rental income or personal income. On top of that, rental properties must show that they’re rent-ready with minimal deferred maintenance before receiving a rental property loan.

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