California Real Estate Financing
This resource center answers practical questions about investor loans, reverse mortgages, and buying or refinancing a home, in three groups of three: Investor and Multifamily Loans, Reverse Mortgages, and Purchase and Refinance. Each answer points to the right professional when a question goes beyond financing.
For a conventional loan sold to Fannie Mae or Freddie Mac, a 1-unit rental purchase allows up to 85% loan-to-value (at least 15% down) and a 2–4 unit rental up to 75% (at least 25% down). There is no single credit score that applies everywhere; lenders set their own minimums, and your score affects pricing and terms.
For a conventional loan sold to Fannie Mae or Freddie Mac, a 1-unit rental purchase allows up to 85% loan-to-value (at least 15% down) and a 2–4 unit rental up to 75% (at least 25% down). There is no single credit score that applies everywhere; lenders set their own minimums, and your score affects pricing and terms.
A building with five or more units is financed as multifamily or commercial real estate, so lenders focus first on the property’s net operating income and its ability to cover the debt. Your net worth, liquidity, credit and management experience also matter, and terms vary widely by program.
Often, yes. Many DSCR loans qualify a rental property mainly on its rent compared with its payment rather than your personal income, but you still document credit, assets, the property and its rent, and approval is never automatic.
A reverse mortgage can fit an older homeowner who plans to stay put and wants to turn home equity into cash without a monthly mortgage payment. The catch is that the balance grows over time, upfront costs can be significant, and you must keep paying taxes, insurance and upkeep.
When the last borrower dies, the reverse mortgage generally becomes due, and your heirs can repay it to keep the home, sell it and keep any remaining equity, or let it go. With an FHA-insured HECM, heirs never owe more than the home is worth; proprietary loans follow their own terms.
Yes, you keep title to your home with a reverse mortgage; the lender holds a lien, just as with a traditional mortgage. You can lose the home, though, if you stop living there or fall behind on taxes, insurance, upkeep or other loan terms and the problem is not resolved.
Many first-time buyers need less than 20% down. Depending on the program and your eligibility, the minimum can be 3% for some conventional loans, 3.5% for FHA, or nothing for eligible VA borrowers, with mortgage insurance, closing costs and reserves still to plan for.
A refinance is usually worth it when the savings repay the closing costs before you expect to sell or refinance again, and the new term still fits your plans. There is no single rate drop that works for everyone; loan size, costs and time decide it.
The amount a lender approves is a ceiling, not a budget. Your real monthly cost includes principal and interest plus property taxes, insurance, any HOA dues, mortgage insurance and special taxes, with maintenance and repairs on top.
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