The 4 Best Real Estate Portfolio Lenders in 2021

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. 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 in 2021

What Is a Portfolio Lender?

A portfolio lender is a bank or other loan originator who holds loans for real estate in a portfolio and doesn’t typically sell them on the secondary mortgage market. It can be a traditional bank or private money lender. Qualifying for a portfolio loan is generally easier than a conventional mortgage, although private money lenders are less strict on buyer qualifications than traditional banks.

Who Are Portfolio Loans Right For?

Portfolio loans may be right for your next investment if you have less than stellar credit, are self-employed, or buying a property that needs rehabilitation. Portfolio loans are also a good choice if you’re buying a property that is priced above the current United States Department of Housing and Urban Development (HUD) conforming loan limits.

Lima One Capital: Best for Fix-and-Flip Investors

Lima One Capital offers four different options for fix-and-flippers. It’s best for investors looking for a portfolio lender for fix-and-flip projects ranging from $75,000 to $1 million.

Lima One Capital Portfolio Loan Rates & Costs

• Rates start at 6.40%
• Loan origination fee up to 3.5%
• Closing costs are 2% to 5% of amount borrowed
• Prepayment penalty/yield maintenance is up to 1% of balance

Lima One Capital’s rates on long-term portfolio loans are lower than its fix-and-flip portfolio loans. Fix-and-flip rates start at 8.5% (interest only) while its long-term loans start at 6.40% (fully amortized). The lower rates typically go to premium borrowers.

Lima One Capital Portfolio Loan Terms

• Fix-and-flip loan: 13 months; 75% after-repair-value (ARV), 90% loan-to-cost (LTC)
• Bridge loan plus: 13 months; 80% loan-to-value (LTV)
• Construction loan: 13 months; 70% ARV, 50% LTV
• Rental30: 30 years; 75% LTV
• Multifamily value-add rehab: 24 years; 75% LTC, 70% ARV (refinance), 50% LTV cash-out
• Multifamily stabilized: 24 years; 70% LTV, 50% LTV for cash-out

Depending on the loan type, Lima One considers 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 a balloon payment at the end of the loan period.

Lima One Capital Minimum Qualifications

• Minimum credit score: 600 to 660, depending on loan product
• Minimum debt service coverage ratio (DSCR): 1.25
• Minimum stable occupancy: 90 days
• Minimum cash reserves: Six months
• Minimum investor experience: New and experienced welcome to apply
• Funding time: Two to four weeks

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 six months of property expenses on a rental, but Lima One can generally close loans within two to four weeks.

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CoreVest: Best Portfolio Lender for Growth

CoreVest offers short-term fix-and-flip loans, ground-up construction, and permanent rental property financing. All of its loan products have fixed interest rates, so your rate will never increase.

CoreVest Portfolio Loan Rates & Costs

• Rates start at 5%
• Minimum loan origination fee is 2% of amount borrowed
• Closing costs are 2% to 5% of loan amount
• Prepayment penalties/yield maintenance vary by loan type

CoreVest’s fixed-interest rates are based on your investment property experience, the equity in the property, and the profitability of the project. Some of its product rates and fees are influenced by credit scores, cash reserves, and your DSCR.

CoreVest Portfolio Loan Terms

• 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% LTV
• Fix-and-flip single-project bridge loan: Up to 24 months; 90% LTV
• Ground-up construction: 12 to 24 months; 90% LTV

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 for qualification for 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.

CoreVest Qualifications & Funding Time

• Minimum credit score: None
• Minimum DSCR: 1.25
• Minimum stable occupancy: Three months at 90%
• Minimum cash reserves: Six months
• Funding time: Minimum of three to six weeks

CoreVest considers the borrower’s investing experience, financial profile, and asset liquidity. It does not base its financing decision on minimum credit scores. Bridge loans can often be funded within three to four weeks, and rental loans in four to six weeks.

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Haus Lending: Best for Competitive Rates

Haus Lending by Roc360° is a lead generation tool that leverages data science and technology to source real estate investor leads for Roc Capital lenders. Roc Capital is an investment capital provider for private money lenders and commercial mortgage brokers. Although it is institutional in size, it prides itself on personalized customer service.

It made our top five Best Portfolio Lenders list because it offers competitive rates, terms, and will fund deals other lenders won’t. It funds fix-and-flips, rental loans, multifamily loans, and ground-up construction.

Haus Lending Portfolio Loan Rates & Costs

• Rates start at 4.00% to 7.95%
• Loan origination fees vary by product
• No advertised closing costs or prepayment penalties

At Haus Lending, rates for its rental programs start at 4.00%. Fix-and-flip and ground-up loans start at 7.95%, and multifamily loans at 6.99%. It doesn’t post its origination fees, closing costs, or give details of prepayment penalties since these vary based on the loan type.

Haus Lending Portfolio Loan Terms

• Fix-and-flip loan: 18 months; 75% ARV; 90% LTC; 100% rehab
• Rental-single property: 30 years; 75% LTC owned less than six months; 5% off max LTV owned six to nine months. Refi 80% LTV, cash-out 75%
• Rental-portfolio: Five, 10, and 30 years; 75% LTC owned less than six months; 5% off max LTV owned six to nine months. Refi 75% LTV, cash-out 70%
• Multifamily program: 12 to 24 months with two six-month extensions; 70% ARV
• Ground-up construction: 18 months; 75% LTC; 65% ARV

Haus Lending terms range from 12 months to 30 years, depending on the loan type. Fix-and-flip loans offer 90% loan-to-cost and 100% rehab costs with a maximum 75% after repair value. Its rental program terms range from five to 30 years. It also offers refinancing on rental properties with 80% loan-to-value on a single property, and 75% LTV on a cash-out refinance.

Haus Lending Minimum Qualifications

• Middle credit score: 680
• Minimum stable occupancy: Up to nine months
• Most loans are full recourse with some exceptions

Haus Lending goes with a middle FICO score of at least 680, and borrowers will need to complete an application, a Scope of Work template, and submit a personal financial statement. It provides these forms on its website. Haus Lending works with experienced investors, and the best rates and terms advertised are for prime borrowers.

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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 Portfolio Loan Rates & Costs

• Interest rates: Start as low as 4.99%
• Loan origination fee: 1.75% to 3% of loan amount
• Closing costs: 2% to 5% of amount borrowed
• Prepayment penalty/yield maintenance on long term loans

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. You’ll need to call to get your custom loan rate.

LendingOne Portfolio Loan Terms

• Fix-and-flip loan: 12-month term, 90% LTC
• RentalOne: 30-year term, 80% LTV
• New construction: 12 to 24 months; 85% LTC

LendingOne offers aggressive LTVs. Loan amounts are $75 thousand to $2 million. It requires six- to 12-months cash reserves of principal, interest, property taxes, homeowner’s insurance, and association dues (PITIA) but allows interest reserves to be included in the loan amount, saving upfront cash for closing costs.

LendingOne Minimum Qualifications

• Minimum credit score: 600 to 620, depending on loan type
• 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

LendingOne accepts credit scores as low as 600 on its 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.

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Advantages and Disadvantages of Portfolio Loans

While portfolio loans can close faster and have fewer credit requirements, they are riskier and come with higher interest rates and fees. An advantage of portfolio lending is borrowers can get funded with larger portfolios or properties that don’t conform to HUD loan limits. Traditional lending typically rejects borrowers who have a minimum of four properties.

Bottom Line

Real estate portfolio lenders offer unconventional financing for investors to purchase, renovate, cash out, renovate, build, or lease. The loans stay in-house and aren’t sold on the secondary mortgage market, so investors work with the same lender from application through loan payoff.