Portfolio Lending for Real Estate Investors

When conventional lending runs out of runway, portfolio lenders keep your growth going.

Conventional mortgage guidelines limit most borrowers to 10 financed properties. Portfolio lenders — banks that hold loans on their own balance sheet rather than selling to Fannie Mae/Freddie Mac — offer solutions for investors who've exceeded these limits.

How portfolio lending differs: Terms are set by the individual bank, not government guidelines. This means more flexibility on property count, income documentation, and entity lending (lending to your LLC rather than you personally).

Typical portfolio loan terms: 5-7 year adjustable rates or 15-20 year fixed, 70-80% LTV, rates 0.5-1.5% above conventional, and 6-12 month seasoning requirements for refinances.

Where to find portfolio lenders: Community banks, credit unions, and regional banks are the primary sources. National banks rarely offer portfolio products for small investors. Build relationships with commercial loan officers at local institutions.

Blanket loans: Some portfolio lenders offer a single loan secured by multiple properties. This simplifies your debt structure and can provide better terms than individual loans.

DSCR loans: Debt Service Coverage Ratio loans qualify based on property income rather than personal income. If the property's rental income exceeds the debt payment by 1.2-1.25x, you qualify regardless of your personal DTI ratio. These have become increasingly popular for investors building rental portfolios.