Short answer: For a conventional loan sold to Fannie Mae, the investment property price adjustment is 3.375% of the loan with 20% down and 2.125% with 25% down, on top of the credit score charge (LLPA Matrix, September 30, 2026). At a rule of thumb of 0.25 percentage point of rate per point of upfront cost, that is roughly 0.84 and 0.53 percentage points above an owner-occupied rate. With Freddie Mac's 7.32% average, that is an estimated 8.16% and 7.85%. These are estimates, not quotes.
Definition
A loan-level price adjustment (LLPA) is a one-time charge Fannie Mae applies to the mortgages it buys, set as a percent of the loan amount and based on credit score, down payment, occupancy, units and other features. Lenders usually pass it on as a higher interest rate or as points at closing.
By the numbers: Fannie Mae's investment property LLPA is 3.375% of the loan with 20% down and 2.125% with 25% down (LLPA Matrix, September 30, 2026). On the US median home with 20% down that is $9,736, or roughly 8.16% instead of 7.32% at a rule-of-thumb 0.25 percentage point of rate per point of LLPA (an estimate, not a quote).
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Starts at the US median home ($360,600) and 3-bed rent ($1,677/mo), Census ACS 2024, at Freddie Mac's 7.32% rate. Assumes tax at 0.89% of price (US median), $1,200/yr insurance, 3% closing costs, 5% vacancy, 5% maintenance and 8% management. Adjust all of these in the full calculator.
The short answer
Higher, and the reason is written down. Fannie Mae charges lenders an extra loan-level price adjustment (LLPA) on every loan for an investment property: 3.375% of the loan with 20% down and 2.125% with 25% down, on top of the credit-score charge an owner-occupant pays (LLPA Matrix, September 30, 2026).
Lenders usually pass that cost on as a higher rate rather than a fee. Using a common rule of thumb of about 0.25 percentage point of rate per point of upfront cost, that is roughly 0.84 percentage point higher with 20% down and 0.53 higher with 25% down. Against Freddie Mac's 7.32% average (October 22, 2026), that is an estimated 8.16% and 7.85%.
On the US median home ($360,600, Census ACS 2024) with 20% down, the adjustment is $9,736. Rolled into the rate, it costs about $168 a month in cash flow.
Good to know: The LLPA percentages are Fannie Mae's published numbers. The investor rates here are estimates from a rule of thumb, not lender quotes. Your real rate depends on the lender, the day, your credit and the points you pay. Get Loan Estimates from several lenders.
What an LLPA is and how it becomes a rate
Fannie Mae buys conventional mortgages from lenders. For riskier loan features, it charges the lender a one-time fee called a loan-level price adjustment, set as a percent of the loan amount. Fannie Mae's own guide says an LLPA applies to all loans secured by an investment property, in addition to any other adjustments. The charges are cumulative: credit score and down payment set one charge, then occupancy, units, condo and other features add their own.
You rarely see the LLPA as its own line. A lender can charge it to you as points at closing, or, more often, price it into a higher interest rate. Discount points work the same way in reverse: one point (1% of the loan) buys a lower rate.
Estimated investor rate ≈ owner-occupied rate + investment LLPA × 0.25The 0.25 is a rule of thumb. The CFPB and Freddie Mac both use "one point for about 0.25% off the rate" as an example, and both say the real trade-off varies by lender, loan type and market. Treat every rate on this page built from it as an estimate.
Why start from Freddie Mac's average? Its weekly survey is built from loan applications for borrowers with good or excellent credit putting 20% down on a one-unit home they will live in. So it already includes the owner-occupant's pricing. The investment LLPA is the extra layer on top.
Tip: When you compare lenders, compare the same rate with the same points. A low advertised investor rate often comes with points that cover the LLPA upfront.
Investment property LLPA by down payment
The investment-property row from Fannie Mae's purchase LLPA table, for the down payments an investor can use. The last two columns apply the rule of thumb and the dollar cost on a loan for the US median home ($360,600) at the top of each band.
| Loan-to-value | Down payment | Investment LLPA | Extra for 2–4 units | ≈ Rate premium (estimate) | LLPA on US median home |
|---|---|---|---|---|---|
| 30% or less | 70%+ | 1.125% | 0.000% | +0.28 | $1,217 |
| 30.01–60% | 40%+ | 1.125% | 0.000% | +0.28 | $2,434 |
| 60.01–70% | 30%+ | 1.625% | 0.375% | +0.41 | $4,102 |
| 70.01–75% | 25%+ | 2.125% | 0.375% | +0.53 | $5,747 |
| 75.01–80% | 20%+ | 3.375% | not eligible | +0.84 | $9,736 |
| 80.01–85% | 15% | 4.125% | not eligible | +1.03 | $12,644 |
The big step is at 80% loan-to-value. Going from 20% down to 25% down cuts the investment LLPA from 3.375% to 2.125%. Fannie Mae's Eligibility Matrix caps investment purchases at 85% loan-to-value for one unit (15% down, with mortgage insurance) and 75% for 2–4 units (25% down). A 2–4 unit rental adds the 2–4 unit LLPA on top: 2.125% + 0.375% = 2.500% at 25% down.
Good to know: These are Fannie Mae's charges for loans it buys. Freddie Mac publishes its own credit fees, and portfolio and DSCR lenders price on their own. The same investment row also applies to refinances in Fannie Mae's matrix.
How credit score stacks on top
Every borrower also pays a credit score and loan-to-value charge, owner-occupant or not. The investment LLPA adds to it. Total LLPAs from Fannie Mae's purchase tables (loans over 15 years):
| Credit score | Home, 20% down | Investment, 20% down | Home, 25% down | Investment, 25% down | 2–4 unit investment, 25% down |
|---|---|---|---|---|---|
| 780 or higher | 0.375% | 3.750% | 0.000% | 2.125% | 2.500% |
| 760–779 | 0.625% | 4.000% | 0.250% | 2.375% | 2.750% |
| 740–759 | 0.875% | 4.250% | 0.375% | 2.500% | 2.875% |
| 720–739 | 1.250% | 4.625% | 0.750% | 2.875% | 3.250% |
| 700–719 | 1.375% | 4.750% | 0.875% | 3.000% | 3.375% |
| 680–699 | 1.750% | 5.125% | 1.125% | 3.250% | 3.625% |
| 660–679 | 1.875% | 5.250% | 1.375% | 3.500% | 3.875% |
| 640–659 | 2.250% | 5.625% | 1.500% | 3.625% | 4.000% |
| 639 or lower | 2.750% | 6.125% | 2.125% | 4.250% | 4.625% |
A 700–719 score with 20% down on a rental totals 4.750% of the loan, about $13,703 on the US median home's $288,480 loan. The gap between "home" and "investment" in each row is the investment LLPA alone, so it is the same at every credit score.
Red flag: A pro forma that uses an advertised owner-occupied rate for a rental. Ask the lender for an investment-property quote at your real credit score and down payment.
What it costs on the US median home
The US median home ($360,600) renting for the US median 3-bedroom gross rent ($1,677/mo), with the US median property tax ($3,211/yr), $1,200 a year insurance (assumed), 5% vacancy, 5% maintenance, 8% management and 3% closing costs: the same assumptions as the good cash flow guide. Three ways to buy it at each down payment:
| Scenario (US median home) | Rate | LLPA paid upfront | P&I / mo | Cash flow / mo | Cash in | Cash-on-cash |
|---|---|---|---|---|---|---|
| 20% down, owner-occupied rate | 7.32% | — | $1,982 | −$974 | $82,938 | -14.1% |
| 20% down, investor pays the LLPA upfront | 7.32% | $9,736 | $1,982 | −$974 | $92,674 | -12.6% |
| 20% down, investor rate (estimate) | 8.16% | in the rate | $2,150 | −$1,142 | $82,938 | -16.5% |
| 25% down, owner-occupied rate | 7.32% | — | $1,858 | −$850 | $100,968 | -10.1% |
| 25% down, investor pays the LLPA upfront | 7.32% | $5,747 | $1,858 | −$850 | $106,715 | -9.6% |
| 25% down, investor rate (estimate) | 7.85% | in the rate | $1,956 | −$949 | $100,968 | -11.3% |
With 20% down, the estimated investor rate of 8.16% raises principal and interest from $1,982 to $2,150, so cash flow falls by about $168 a month. With 25% down the drop is about $99, because the LLPA is smaller and so is the loan. Paying the LLPA upfront keeps the payment the same but adds $9,736 or $5,747 to the cash you bring. Click a row to open it in the calculator.
Tip: Paying upfront is like buying points: it only pays off if you keep the loan long enough. Divide the upfront cost by the monthly savings to get the break-even in months, as the CFPB suggests.
Second home vs investment property rates
In Fannie Mae's matrix the second-home LLPA row is identical to the investment-property row, so at the same down payment the price adjustment is the same. The differences are in the rules:
- Down payment. A second home can be bought with up to 90% loan-to-value (10% down); an investment property is capped at 85% for one unit.
- It must be a real second home. Fannie Mae requires you to live in it for part of the year, it must be one unit, and it can't be a rental or have a management company controlling who stays there.
- Rent doesn't count. If a second home earns some rent, that income can't be used to qualify for the loan.
An owner-occupied home is the only one of the three with no occupancy LLPA. A 2–4 unit you live in can go up to 95% loan-to-value with Fannie Mae, which is why house hacking is the usual way beginners get owner-occupied pricing on rental units.
Red flag: Telling a lender you will live in a home you plan to rent out. Occupancy is part of the loan application, and misstating it is mortgage fraud.
Cash flow lost to the investor premium in 98 cities
Each city's median-priced home renting for the city's median 3-bedroom gross rent, 20% down on a 30-year loan, the city's median property tax, $1,200 a year insurance (assumed), 5% vacancy, 5% maintenance, 8% management. First at Freddie Mac's 7.32%, then at the estimated investor rate of 8.16% (7.32% + 3.375% × 0.25). Sorted by cash flow at the investor rate.
| # | City | Median value | Cash flow at 7.32% | Cash flow at 8.16% | Change / mo |
|---|---|---|---|---|---|
| 1 | Detroit, MI | $95,900 | $284 | $239 | −$45 |
| 2 | Cleveland, OH | $109,600 | $63 | $11 | −$51 |
| 3 | Toledo, OH | $122,600 | $17 | −$40 | −$57 |
| 4 | Pittsburgh, PA | $220,400 | −$120 | −$222 | −$103 |
| 5 | Rochester, NY | $164,300 | −$182 | −$258 | −$77 |
| 6 | Birmingham, AL | $189,800 | −$173 | −$261 | −$88 |
| 7 | Buffalo, NY | $187,000 | −$257 | −$344 | −$87 |
| 8 | Memphis, TN | $209,800 | −$252 | −$350 | −$98 |
| 9 | Lubbock, TX | $223,600 | −$283 | −$387 | −$104 |
| 10 | Corpus Christi, TX | $234,000 | −$328 | −$437 | −$109 |
| 11 | Gainesville, FL | $270,800 | −$335 | −$461 | −$126 |
| 12 | Wichita, KS | $212,900 | −$392 | −$492 | −$99 |
| 13 | Philadelphia, PA | $253,600 | −$379 | −$497 | −$118 |
| 14 | St. Louis, MO | $214,500 | −$416 | −$516 | −$100 |
| 15 | Tulsa, OK | $234,400 | −$437 | −$547 | −$109 |
| 16 | Kansas City, MO | $261,600 | −$425 | −$547 | −$122 |
| 17 | Indianapolis, IN | $241,500 | −$462 | −$574 | −$113 |
| 18 | El Paso, TX | $209,600 | −$477 | −$574 | −$98 |
| 19 | Baltimore, MD | $247,400 | −$462 | −$577 | −$115 |
| 20 | San Antonio, TX | $260,900 | −$470 | −$591 | −$122 |
| 21 | Milwaukee, WI | $207,900 | −$499 | −$596 | −$97 |
| 22 | Oklahoma City, OK | $259,300 | −$518 | −$639 | −$121 |
| 23 | Louisville, KY | $241,700 | −$537 | −$650 | −$113 |
| 24 | Tucson, AZ | $299,700 | −$511 | −$650 | −$140 |
| 25 | Cincinnati, OH | $263,300 | −$557 | −$680 | −$123 |
| 26 | Columbus, OH | $279,900 | −$564 | −$694 | −$131 |
| 27 | Omaha, NE | $269,500 | −$593 | −$719 | −$126 |
| 28 | Norfolk, VA | $311,200 | −$590 | −$736 | −$145 |
| 29 | Tallahassee, FL | $294,500 | −$615 | −$752 | −$137 |
| 30 | Houston, TX | $301,200 | −$623 | −$763 | −$140 |
| 31 | Winston-Salem, NC | $281,200 | −$639 | −$770 | −$131 |
| 32 | Jacksonville, FL | $325,300 | −$647 | −$798 | −$152 |
| 33 | New Orleans, LA | $305,100 | −$670 | −$812 | −$142 |
| 34 | Greensboro, NC | $290,200 | −$679 | −$814 | −$135 |
| 35 | Irving, TX | $349,800 | −$674 | −$837 | −$163 |
| 36 | Knoxville, TN | $294,700 | −$728 | −$865 | −$137 |
| 37 | Fort Worth, TX | $330,500 | −$727 | −$881 | −$154 |
| 38 | Lexington, KY | $318,400 | −$782 | −$931 | −$148 |
| 39 | Arlington, TX | $337,800 | −$780 | −$937 | −$157 |
| 40 | Lincoln, NE | $278,200 | −$814 | −$944 | −$130 |
| 41 | Albuquerque, NM | $324,600 | −$844 | −$995 | −$151 |
| 42 | St. Petersburg, FL | $436,200 | −$801 | −$1,004 | −$203 |
| 43 | Dallas, TX | $340,400 | −$861 | −$1,019 | −$159 |
| 44 | St. Paul, MN | $301,800 | −$896 | −$1,037 | −$141 |
| 45 | Hialeah, FL | $446,800 | −$848 | −$1,057 | −$208 |
| 46 | Orlando, FL | $430,200 | −$869 | −$1,070 | −$201 |
| 47 | Virginia Beach, VA | $403,200 | −$931 | −$1,119 | −$188 |
| 48 | Fresno, CA | $396,300 | −$959 | −$1,144 | −$185 |
| 49 | Mesa, AZ | $440,800 | −$949 | −$1,155 | −$206 |
| 50 | Spring Valley, NV | $440,200 | −$985 | −$1,190 | −$205 |
| 51 | Chicago, IL | $341,200 | −$1,042 | −$1,201 | −$159 |
| 52 | Phoenix, AZ | $454,900 | −$995 | −$1,207 | −$212 |
| 53 | Bakersfield, CA | $406,500 | −$1,028 | −$1,218 | −$190 |
| 54 | Nashville, TN | $438,800 | −$1,025 | −$1,229 | −$205 |
| 55 | Minneapolis, MN | $368,300 | −$1,063 | −$1,235 | −$172 |
| 56 | Richmond, VA | $377,900 | −$1,118 | −$1,294 | −$176 |
| 57 | Aurora, CO | $494,600 | −$1,068 | −$1,299 | −$231 |
| 58 | Charlotte, NC | $431,900 | −$1,107 | −$1,308 | −$201 |
| 59 | Las Vegas, NV | $458,300 | −$1,109 | −$1,323 | −$214 |
| 60 | Colorado Springs, CO | $479,500 | −$1,135 | −$1,359 | −$224 |
| 61 | Durham, NC | $439,400 | −$1,167 | −$1,372 | −$205 |
| 62 | Worcester, MA | $411,700 | −$1,225 | −$1,417 | −$192 |
| 63 | Stockton, CA | $456,800 | −$1,255 | −$1,468 | −$213 |
| 64 | Tempe, AZ | $488,600 | −$1,244 | −$1,472 | −$228 |
| 65 | Raleigh, NC | $450,300 | −$1,280 | −$1,490 | −$210 |
| 66 | Newark, NJ | $396,600 | −$1,351 | −$1,536 | −$185 |
| 67 | Henderson, NV | $520,400 | −$1,328 | −$1,571 | −$243 |
| 68 | Tampa, FL | $494,400 | −$1,369 | −$1,599 | −$231 |
| 69 | Madison, WI | $418,400 | −$1,409 | −$1,604 | −$195 |
| 70 | Atlanta, GA | $462,200 | −$1,456 | −$1,671 | −$216 |
| 71 | Providence, RI | $413,800 | −$1,483 | −$1,676 | −$193 |
| 72 | Tacoma, WA | $500,500 | −$1,484 | −$1,718 | −$233 |
| 73 | Sacramento, CA | $515,800 | −$1,480 | −$1,720 | −$240 |
| 74 | Reno, NV | $567,700 | −$1,599 | −$1,864 | −$265 |
| 75 | Plano, TX | $541,700 | −$1,653 | −$1,905 | −$253 |
| 76 | Riverside, CA | $616,400 | −$1,729 | −$2,016 | −$287 |
| 77 | Denver, CO | $636,400 | −$1,746 | −$2,043 | −$297 |
| 78 | Portland, OR | $588,200 | −$1,888 | −$2,162 | −$274 |
| 79 | Yonkers, NY | $521,700 | −$2,019 | −$2,262 | −$243 |
| 80 | Miami, FL | $598,200 | −$2,027 | −$2,306 | −$279 |
| 81 | Austin, TX | $571,000 | −$2,042 | −$2,309 | −$266 |
| 82 | Jersey City, NJ | $571,700 | −$2,158 | −$2,425 | −$267 |
| 83 | Alexandria, VA | $704,200 | −$2,135 | −$2,464 | −$328 |
| 84 | Salt Lake City, UT | $620,100 | −$2,312 | −$2,602 | −$289 |
| 85 | Washington, DC | $733,400 | −$2,408 | −$2,750 | −$342 |
| 86 | Santa Ana, CA | $772,600 | −$2,554 | −$2,915 | −$360 |
| 87 | Boston, MA | $722,800 | −$2,677 | −$3,014 | −$337 |
| 88 | Honolulu, HI | $850,100 | −$3,006 | −$3,402 | −$396 |
| 89 | Long Beach, CA | $849,500 | −$3,051 | −$3,447 | −$396 |
| 90 | New York, NY | $778,600 | −$3,217 | −$3,580 | −$363 |
| 91 | Anaheim, CA | $892,200 | −$3,233 | −$3,649 | −$416 |
| 92 | Arlington, VA | $945,700 | −$3,325 | −$3,766 | −$441 |
| 93 | San Diego, CA | $980,700 | −$3,496 | −$3,953 | −$457 |
| 94 | Seattle, WA | $950,800 | −$3,530 | −$3,974 | −$443 |
| 95 | Oakland, CA | $884,000 | −$3,654 | −$4,066 | −$412 |
| 96 | Los Angeles, CA | $947,900 | −$3,719 | −$4,161 | −$442 |
| 97 | Glendale, CA | $1,182,800 | −$4,960 | −$5,512 | −$551 |
| 98 | San Jose, CA | $1,271,200 | −$5,115 | −$5,708 | −$593 |
| United States | $360,600 | −$974 | −$1,142 | −$168 |
The premium costs the median city about $189 a month, from $45 in Detroit, MI to $593 in San Jose, CA, because it scales with the loan. At the owner-occupied rate 3 cities cash-flow on a median home; at the investor rate only 2 (Detroit, MI and Cleveland, OH). Click an investor cash flow figure to open it in the calculator.
Good to know: These are citywide survey medians with margins of error, and the median rental and median owner-occupied home are different houses. ACS reports rents above $3,500 only as "$3,500+", so San Francisco, CA, Irvine, CA are left out, and taxes above $10,000 are capped at $10,000. City market pages use their own insurance estimates.
How to get a lower investment property rate
You can't avoid the investment LLPA on a conventional loan, but you can shrink what sits around it:
- Put 25% down. It drops the investment LLPA from 3.375% to 2.125%, and with a 780+ score the credit charge falls from 0.375% to 0.000%.
- Raise your score before you apply. At 20% down, each step down the credit table adds 0.125 to 0.5 point of LLPA.
- Shop at least three lenders on the same day. Compare Loan Estimates with the same points, since LLPAs show up as rate or points.
- Know what a DSCR loan is. DSCR loans qualify on the property's rent and are priced by each lender, not this matrix, and often cost more. See what DSCR lenders want.
- Make the deal work at the higher rate. If it only cash-flows at an owner-occupied rate, it doesn't work as a rental. The max offer calculator finds the price that does.
For how far rates would have to fall for a typical home to cash-flow at all, see the break-even mortgage rate guide. For the cash you need to close, see how much money you need for a first rental.
Worked example
The US median home ($360,600, Census ACS 2024) bought as a rental with 20% down at an estimated investor rate of 8.16% for 30 years: Freddie Mac's 7.32% (October 22, 2026) plus Fannie Mae's 3.375% investment LLPA at 0.25 percentage point of rate per point (rule of thumb, not a quote). Rent is the US median 3-bedroom gross rent ($1,677/mo), the US median property tax ($3,211/yr), $1,200/yr insurance (assumed), 5% vacancy, 5% maintenance, 8% management, closing costs assumed at 3% ($10,818).
| Rent / mo | $1,677 |
| Operating costs (/mo) | −$669 |
| Mortgage (P&I) at 8.16% | −$2,150 |
| Cash flow / mo | −$1,142 |
| Cash flow at the owner-occupied 7.32% | −$974 |
Frequently asked questions
How much higher are investment property mortgage rates?
For a conventional loan sold to Fannie Mae, the investment property price adjustment is 3.375% of the loan with 20% down and 2.125% with 25% down, on top of the credit score charge (LLPA Matrix, September 30, 2026). At a rule of thumb of 0.25 percentage point of rate per point of upfront cost, that is roughly 0.84 and 0.53 percentage points above an owner-occupied rate. With Freddie Mac's 7.32% average, that is an estimated 8.16% and 7.85%. These are estimates, not quotes.
What is a loan-level price adjustment (LLPA)?
A one-time charge Fannie Mae applies to loans it buys, set as a percent of the loan amount, based on features like credit score, down payment, occupancy and number of units. Lenders usually pass it on as a higher rate or as points at closing.
Is a second home rate the same as an investment property rate?
In Fannie Mae's matrix the second home and investment property price adjustments are identical at every loan-to-value. A second home can be financed with up to 90% loan-to-value but must be one unit you live in part of the year and can't be a rental. An investment property is capped at 85% for one unit.
What is the minimum down payment for an investment property?
For conventional loans sold to Fannie Mae, the Eligibility Matrix allows up to 85% loan-to-value on a one-unit investment purchase (15% down) and 75% on 2 to 4 units (25% down). Lenders can require more.
How much does the investor rate premium cost per month?
On the US median home ($360,600) with 20% down, an estimated 8.16% instead of 7.32% adds about $168 a month to principal and interest. Across 98 big US cities the median home loses about $189 a month more.
Keep learning
Sources
Educational content, not financial advice. Loan programs and requirements change; confirm with a lender.