How much reserves do I need for a conventional investment property?
Typically 6 months of full housing payment (PITI) on the subject investment property at minimum, plus 2 months on each of the borrower's other financed properties. Borrowers with 5+ financed properties face stricter reserve requirements per Fannie's multi-financed-property rule.
What this actually means.
Reserve math on investment-property conventional: subject property typically 6 months PITI; each other financed property 2 months PITI; primary residence usually has its own reserve calc separately. Reserves come from checking, savings, retirement accounts (vested portion at a discount), or stocks. Multi-financed-property borrowers (5+ financed properties) face increased reserve requirements per Fannie's published rule. Subject to Fannie/Freddie guidelines.
Where this can move.
Down payment, reserves, rental income calculation, multi-financed-property reserve rules, and investment LLPAs all stack to drive pricing.
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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. Mortgage Expert, Inc. is not affiliated with Fannie Mae, Freddie Mac, FHFA, or any government agency.