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An SFR, or single-family residence, refers to properties that are from 1-4 units. SFR real estate is appealing to both real estate investors and owner-occupiers. Investors appreciate their affordability, ease of management, and appeal to renters. Owners are drawn to the freedom of homeownership and the appreciation and equity. Read on to learn about how SFR properties are financed and what you should know if you’re considering investing in one
When it comes to financing a single-family home, there are essentially two giant buckets: government-sponsored loans and private label loans. These can further be broken down into consumer/owner-occupier loans and business purpose/investor loans. Let’s dive into each of these four categories to gain a deeper understanding.
These loans are also less expensive and meet the criteria established by Fannie and Freddie. These loans are targeted at owner-occupiers and often first-time home buyers. Here are some special loan programs under this branch:
This bucket of loans is less expensive, yet more restrictive. They can be very hard to qualify for, especially for self-employed investors with multiple rental properties.
Lastly, these loans are designed for consumers who do not meet the criteria set forth by Fannie and Freddie. These typically include jumbo loans and non-QM loans:
This loan group tends to be more expensive, yet flexible and can help investors grow their businesses. Here are some of the loan programs that fall under this category:
We hope the above categories can help you easily find what kind of loan you need. If you’re a consumer, look into those options. For a business, look at business purpose loans — then determine if you meet the criteria for government-sponsored loans and go from there.
If you are a rental property investor who has exceeded the number of mortgaged properties or can no longer meet the DTI requirements set by Fannie and Freddie, Visio can help.
Our leading rental loans are tailored to meet the needs of investors with: