Mound City Lending

Rental Property Loans

Long-term financing solutions for investors acquiring rental properties to generate passive income. Our rental property loans offer competitive rates, flexible terms, and fast closings to help you build your real estate portfolio.

Loan Features

Up to 80% LTV

Finance up to 80% of the property value with competitive loan-to-value ratios. Lower down payment requirements for experienced investors.

30-Year Amortization

Long-term loans with 30-year amortization schedules to maximize cash flow. Balloon payments typically due in 5-10 years with refinance options.

Portfolio Building

Ideal for building a rental property portfolio. We offer preferential terms for repeat borrowers and multi-property financing.

Loan Terms & Rates

Standard Terms
Loan Amount:$100,000 - $5,000,000
Loan-to-Value (LTV):Up to 80%
Interest Rate:7.5% - 10.5%
Amortization:30 years
Balloon Payment:5-10 years
DSCR Requirement:1.20x minimum
Fees & Costs
Origination Fee:1.5% - 2.5%
Processing Fee:$750
Appraisal Fee:$500 - $800
Property Inspection:$300 - $500
Title & Escrow:Varies by state
Prepayment Penalty:3-2-1 declining

DSCR (Debt Service Coverage Ratio)

Rental property loans are underwritten based on the property's cash flow, not your personal income. We require a minimum DSCR of 1.20x, meaning the property's net rental income must be at least 120% of the monthly mortgage payment.

DSCR Formula: Monthly Rental Income ÷ Monthly Debt Payment

Example: $2,400 rent ÷ $2,000 payment = 1.20 DSCR ✓

Qualification Requirements

Borrower Requirements
  • Must operate through a business entity (LLC, Corporation, Partnership)
  • Minimum credit score of 660 (higher scores receive better rates)
  • Proof of funds for down payment (20-30% of purchase price)
  • Pass borrower competency assessment (75% minimum score)
  • Cash reserves for 6 months of mortgage payments
Property Requirements
  • Single-family residences, townhomes, condos, or small multifamily (1-4 units)
  • Non-owner occupied investment properties only
  • Property must be in rentable condition or require minor repairs only
  • Located in acceptable markets (we lend in most major metro areas)
  • Clear title with no liens or encumbrances
Cash Flow Requirements
  • Minimum DSCR of 1.20x (rental income vs. mortgage payment)
  • Market-rate rental income supported by comparable rentals
  • Existing lease agreement (if property is currently rented)
  • Rent roll and income verification for multifamily properties
  • Property insurance and landlord liability coverage required

Example Scenario

Typical Rental Property Acquisition

Property Details

Purchase Price:$350,000
Property Type:Single-Family
Bedrooms/Baths:3 BR / 2 BA
Monthly Rent:$2,800
Location:Suburban Metro
Condition:Move-in Ready

Loan Structure

Loan Amount (75% LTV):$262,500
Down Payment (25%):$87,500
Interest Rate:8.5%
Amortization:30 years
Monthly P&I Payment:$2,018
DSCR:1.39x ✓

Monthly Cash Flow Analysis

Gross Rental Income:$2,800
Vacancy Reserve (5%):-$140
Effective Rental Income:$2,660
Mortgage Payment (P&I):-$2,018
Property Tax:-$350
Insurance:-$150
HOA Fees:-$0
Maintenance Reserve:-$100
Monthly Cash Flow:$42
Annual Cash-on-Cash Return:5.8%
Total Annual Return (with appreciation):~9-12%

Note: This example assumes 3% annual appreciation and stable rental market. Actual returns depend on property management, maintenance costs, and local market conditions. Principal paydown and tax benefits provide additional returns not shown in cash flow.

Build Your Rental Portfolio Today

Start generating passive income with our competitive rental property financing. Fast approvals and flexible terms for experienced investors.