Why are investment property rates higher on conventional?
Because Fannie/Freddie LLPAs add a material rate or points adjustment for non-owner-occupied properties. Combined with credit and LTV LLPAs, investment-property pricing can be 0.75-1.5%+ higher than the same borrower's primary-residence rate. The agencies price for the higher default risk on investments.
Plain-English explanation
Investment LLPAs reflect statistical default-risk differences between owner-occupied and non-owner-occupied loans. The LLPA is a fixed adjustment per the matrix and is layered on top of credit-score and LTV adjustments. The result: a 740-credit, 75% LTV primary-residence rate might be 6.5%; the same borrower's investment-property rate at the same LTV/credit might be 7.5-8%. Subject to current Fannie/Freddie LLPAs.
What can change the answer?
Down payment, reserves, rental income calculation, multi-financed-property reserve rules, and investment LLPAs all stack to drive pricing.
Want the real answer for your conventional file?
Conventional guidelines are the rule. Your credit, income, DTI, PMI, LLPAs, and Florida payment math are what decide the actual answer.
More conventional questions on Investment Property
Educational only. Conventional loan guidelines, lender overlays, rates, fees, PMI, LLPAs, and underwriting requirements can change. Final eligibility depends on full underwriting review.