Portfolio lenders provide unconventional mortgages for real estate investors looking for short-term, fast funding solutions, long-term loans for multiple rental properties, or commercial financing. Portfolio lenders hold the promissory notes instead of selling them on the secondary mortgage loan market. This type of loan is more expensive than a conventional loan, but lenders offer flexible borrower qualifications and fast closings to accommodate investors.
Top Real Estate Portfolio Lenders for Investors 2020
Portfolio Lender | Best for |
|---|---|
Growing a large portfolio | |
Fix-and-flip investors | |
Aggressive ground-up construction loans | |
Loans from $5 million to $35 million |
CoreVest: Best Portfolio Lender for Growing a Portfolio
CoreVest offers short-term fix-and-flip loans, ground-up construction, and permanent rental property financing. All of its loan products carry fixed interest rates, so your rate will never increase. CoreVest looks at the borrowers’ overall credit profile, investing track record, and liquidity, instead of specific FICO scores.
CoreVest Portfolio Loans
Loan Type | Best For |
|---|---|
Five or more stable rental properties | |
Single Rental Property | Fixed rate for fully rented properties |
Fast purchases | |
Fix-and-Flip Bridge Loan | Single project purchase and renovation |
Ground-up Construction | Renovations or ground-up construction |
CoreVest Portfolio Loan Rates, Costs & Terms
CoreVest’s fixed-interest rates are based on your investment property experience, the equity in the property, and the potential upside of the project. In addition, some products rates and fees are influenced by credit score, cash reserves, and debt service coverage ratio (DSCR).
Rates Starting at | 5% |
Starting Loan Origination Fee | 2% |
Closing Costs | 2% to 5% of loan |
Prepayment Penalty (Yield Maintenance) | Varies with loan product |
CoreVest offers loan terms as short as 12 months on its bridge and commercial multifamily loans and up to 30 years on permanent rental financing. CoreVest considers the loan-to-value (LTV) ratio on its blanket loans and single rentals and uses the loan-to-cost (LTC) ratio on the two fix-and-flip loans and the ground-up construction loans.
Loan Type | Term | Ratio |
|---|---|---|
Blanket Mortgage | Five, seven, and 10 years | 75% LTV |
Single Rental | 30 years | 75% LTV |
Fix-and-Flip Credit Line | 18 to 24 months | 90% LTC |
Fix-and-Flip Single-project Bridge Loan | Up to 24 months | 90% LTC |
Ground-up Construction | 12 to 24 months | 80% LTC |
CoreVest Qualifications & Funding Time
CoreVest considers the borrower’s experience and does not have a minimum credit score. Instead, loan officers look at a borrower’s overall credit profile, investing experience, and liquidity. CoreVest can fund its bridge loans within three to four weeks, and rental loans in four to six weeks.
Minimum Credit Score | None |
Minimum DSCR | 1.25 |
Minimum Stable Occupancy | Three months at 90% |
Cash Reserves Minimum | Six months |
Minimum Investor Experience | Two past projects |
Funding Time | Three to six weeks, depending on loan |
Lima One Capital: Best for Fix-and-Flip Investors
Lima One Capital offers a wide variety of portfolio mortgage loans, including four different options for fix-and-flippers. It’s best for investors looking for a lender for fix-and-flip projects ranging from $75,000 to $1 million.
Lima One Capital Portfolio Loans
Loan Type | Best For |
|---|---|
Fix-and-Flip Loan | Purchase, renovate, and sell property |
Bridge Loan Plus | Short-term bridge to long-term financing |
Construction Loan | Construction financing on land with no liens |
Rental30 | Long-term financing between $75,000 and $1 million |
Multifamily Value-add Rehab | Fast due diligence and closing |
Multifamily Stabilized | Competitive interest-only rate |
Lima One Capital Portfolio Loan Rates, Costs & Terms
Lima One Capital’s rates on long-term portfolio loans are lower than its fix-and-flip portfolio loans. Fix-and-flip rates are between 8% to 12% (interest only) while their long-term loans range from 5% to 7.99% (fully amortized).
Rates Starting at | 5% |
Starting Loan Origination Fee | Up to 3.5% |
Closing Costs | 2% to 5% of loan |
Prepayment Penalty (Yield Maintenance) | Up to 1% |
Depending on the loan type, Lima One considers after-repair-value (ARV), LTC, and LTV. Terms range from 13 months to two years. The Multifamily Rehab and Stabilized loans are interest-only. This means you’ll make interest payments during the 24-month term and pay the principal and any outstanding interest and fees in full at the end of the loan period.
Loan Type | Term | Ratio |
|---|---|---|
Fix-and-Flip Loan | 13 months | 75% ARV, 90% LTC |
Bridge Loan Plus | 13 months | 80% LTV |
Construction Loan | 13 months | 70% ARV, 50% LTV |
Rental30 | 30 years | 75% LTV |
Multifamily Value-add Rehab | 24 years | 75% LTC, 70% ARV (refi), 50% LTV cash-out |
Multifamily Stabilized | 24 years | 70% LTV, 50% LTV for cash-out |
Lima One Capital Minimum Qualifications
Lima One Capital has different qualification requirements for each product. Minimum credit scores range from 600 to 660. Borrowers will need six months of cash reserves in the bank to cover carrying costs on a fix-and-flip or property expenses on a rental, but Lima One can close loans within two to four weeks.
Minimum Credit Score | 600 to 660 |
Minimum DSCR | 1.25 |
Minimum Stable Occupancy | 90 days |
Cash Reserves Minimum | Six months |
Minimum Investor Experience | New and experienced investors |
Funding Time | Two to four weeks |
LendingOne: Best for New Construction
LendingOne is a good option for builders, developers, and investors looking for competitive portfolio lending for the acquisition, development, or construction of ground-up projects. Short-term investors looking to fix-and-flip within 12 months, and investors looking to expand or enhance their rental portfolios with long-term fixed rates are also a good fit.
LendingOne Types of Portfolio Loans
Loan Type | Best For |
|---|---|
New Construction | Ground-up construction, single-family, and multifamily properties |
Fix-and-Flip Loans | Short-term hard money loan |
RentalOne | Growing a portfolio |
LendingOne Portfolio Loan Rates, Costs & Terms
LendingOne offers fix-and-flip and rental loan products, each with different rates and terms. Its 30-year products start in the 5% range, and fix-and-flip loans start around 8%. Rates are based on credit score and LTV. Its loan origination fees are one of the lowest in our research.
Rates Starting at | 4.99% |
Starting Loan Origination Fee | 1.75% to 3% |
Closing Costs | 2% to 5% of loan |
Prepayment Penalty (Yield Maintenance) | Only on long-term loan |
LendingOne offers aggressive LTVs and high maximum loan amounts. For fix-and-flips, it requires the investor to own their own home and gives preference to experienced investors. It requires six- to 12-months principal, interest, property taxes, homeowner’s insurance, and association dues (PITIA) cash reserves but allows interest reserves to be included in the loan amount, saving upfront required cash for closing costs.
Loan | Term | Ratio |
|---|---|---|
Fix-and-Flip Loan | 12 months | 90% LTC |
RentalOne | 30 years | 80% LTV |
New Construction Loan | 12 to 24 months | 85% LTC |
LendingOne Minimum Qualifications
LendingOne accepts credit scores as low as 600 on the short-term loan products. Its long-term products require a 620 minimum. LendingOne is the only lender to have no DSCR restrictions on its portfolio mortgage loans.
Minimum Credit Score | 600 to 620 |
Minimum DSCR | None |
Minimum Stable Occupancy | 90 days |
Cash Reserves Minimum | Six months |
Minimum Investor Experience | New and experienced investors |
Funding Time | 10 days; 30 days for ground-up loans |
Alliant Credit Union: Best National Credit Union With Commercial Portfolio Lending
Alliant Credit Union is a national commercial portfolio lender that funds projects between $5 million and $35 million. Typical commercial properties Alliant Credit Union finances include industrial complexes, large multifamily apartments, self-storage, manufactured housing communities, hospitality buildings, retail, and parking. Alliant Credit Union only works through mortgage brokers, not directly with investors, so if you want funding through them, contact your mortgage broker.
Alliant Credit Union Types of Portfolio Loans
Loan Type | Best For |
|---|---|
Multifamily | Age-restricted, Section 8, student housing; large number of units |
Industrial | Warehouses, single- and multitenant industrial properties; top 75% of PWC ranked markets; top 50% by asset class |
Office Buildings | A to C+ asset class ratings also in the top 75% PWC ranked markets |
Commercial Retail | Multitenant retail centers; no tenant representing more than 35% of rental income |
Self-storage | Existing properties only; gated and fenced with 24/7 monitoring |
Manufactured Housing Community | Age-restricted manufactured housing communities; financing is for pads only |
Commercial Hospitality | 100-plus keys and major franchises, in major commercial or vacation demand areas |
Parking Lot | High-demand locations; minimal to no deferred maintenance |
Alliant Credit Union Portfolio Loan Rates, Costs & Terms
Alliant Credit Union doesn’t publish its interest rates, so interested borrowers need to have their mortgage brokers call for rates based on the type of property they’re looking to finance and their personal financial profile. Alliant offers both fixed and variable rate commercial portfolio loans. Loan processing fees are dependent on the property type, location, and underwriting.
Rates Starting at | Risk-based pricing |
Starting Loan Origination Fee | 1.75% to 3% |
Closing Costs | $4,500 to $50,000 |
Prepayment Penalty (Yield Maintenance) | 3% declining |
Alliant Credit Union offers five-, seven-, and 10-year terms and also will consider allowing borrowers to refinance at the end of the five- or seven-year term, depending on the type of property.
Loan | Term | Details From Alliant |
|---|---|---|
Multifamily | Five-, seven-, 10-year | |
Industrial | Five-, seven-, 10-year | |
Office Buildings | Five-, seven-, 10-year | |
Commercial Retail | Five-, seven-, 10-year | |
Self-storage | Five-, seven-, 10-year | |
Manufactured Housing Community | Five-, seven-, 10-year | |
Commercial Hospitality | Five- or seven-year | |
Structured and Surface Parking Lot | Five-, seven-, 10-year |
Alliant Credit Union Minimum Qualifications
Alliant Credit Union minimum credit scores are generally 680 to 720. Alliant Credit Union also focuses on the DSCR, which is typically around 1.25% for most property types. Occupancy varies by property, and it generally does not want any single occupant to provide more than 35% of the rental income.
Minimum Credit Score | 680 to 720 |
Minimum DSCR | 1.2 to 1.25 |
Minimum Stable Occupancy | Varies |
Cash Reserves Minimum | Tax reserves required on some properties |
Minimum Investor Experience | New and experienced investors |
Funding Time | 60 to 90 days |
Advantages and Disadvantages of Portfolio Loans
While portfolio loans can close faster and have fewer personal financial or credit requirements, they also are riskier and come with higher interest rates and fees. An advantage of portfolio lending is borrowers can get funded with larger portfolios. Traditional lending typically rejects borrowers who have a minimum of four properties and doesn’t typically offer commercial financing.
Advantages | Disadvantages |
|---|---|
Fast closing time | Higher interest rates |
Lower personal credit requirements | Higher fees |
Will finance deals traditional lenders rejected | Prepayment penalties |
Can purchase multiple properties | Fewer consumer protections |
Bottom Line
Real estate portfolio lenders offer unconventional financing for investors wanting to purchase, renovate, cash out, build, or lease. Their loans stay in-house, making them a terrific option for financing real estate investments. Our research compared key features, including rates, terms, and qualification minimums to help you decide which lender is best for you.
Matthew Kenney
Hi I’m looking for a new mortgage, temporary fix that is to get me out of Wells Fargo. I’m looking for a cash out refi that pretty much looks like it’ll be a portfolio product. We have a ton of equity in our house but I can’t get any bank to work with me at all, that is until I have 12 on time payments made which will be early next year, March time frame probably. Wells Fargo will not delete my so called late payments that I have which is making it not possible to cash out refi my house in September, so I told them today that they are losing my business ASAP. Banks these days suck, you’d think with a guy who has 100k in equity to pay off all of his debt, they would help but not the case. We have low credit scores but they are slowly going up, almost 500 for me and wife is sitting at roughly 590. All this happened because if something that wasn’t our fault and we had to pay late on everything. Car accident before my son was born and we got nothing out of it and were forced to buy a new car which wasn’t in the budget at the time. What are my options.
Allison Bethell
Hi Matthew:
That can be frustrating and I’m sorry to hear about your difficulties. I hope things improve. It may be a good idea to speak to someone in a higher position at Wells Fargo to see if there is anything they can do. The only things I can think of are a home equity line of credit, a cash out refinance or seeing if you could get a loan at a credit union or somewhere you have a positive banking relationship.
All the best,
Allison
Terry
Very helpful article, Evan. I’ve been recently investigating portfolio loans and it feels somewhat like shopping for a car! Every company seems to have their own nuances and it’s hard to make good comparisons. We’re looking at picking up rental #6 and have hit “the wall” with traditional mortgages/banks. Portfolio lending sounds like it will be our solution. Any other resources you can recommend for someone to learn more about this topic?
Allison Bethell
Hi Terry. Allison here, I’m a real estate investing writer at fitsmallbusiness. Thank you for reading the article and I’m glad it was helpful. Congrats on rental #6 and yes portfolio loans are intended for investors with multiple properties like yourself. Check out our article on portfolio lending for more information. https://fitsmallbusiness.com/portfolio-loan-mortgages/
Hope that helps.
Isaac Stokes
That was amazing Evan, thanks! I guess Visio is good too?
Evan Tarver
Hi Issac,
Thanks for the kind words and I’m glad you got a chance to read the article. I’m actually not personally familiar with Viso Lending. However, I checked out their site and they seem to be a legitimate portfolio lending option at first blush.
It looks like they specialize in long-term loans for landlords and real estate investors. Notice that they don’t offer any fix-and-flip loans though. Lima One in our article offers similar long-term loans to Visio, as well as short-term loans for fix and flip investors.
I would reach out to them if you’re looking for either a short-term or more permanent investment property loan. However, if you’re already in talks with Visio, it seems like they would be a good option, too. Of course, you’ll have to do your own due diligence and speak to legal and/or tax professionals before making a decision.
Hope this helps,
Evan
Lois
Excellent comparison, Thank you!
Evan Tarver
Thanks Lois!