Conventional lenders love to say no after your 4th or 10th mortgage. But what if you’re building a serious portfolio?
That’s where portfolio loans come in.
Portfolio loans are designed for real estate investors who want to finance 5 or more rental properties, refinance a growing portfolio, or consolidate multiple assets under one loan.
In this guide, we’ll break down exactly how portfolio loans work, when to use them, and how smart investors use them to scale without hitting conventional lending limits.
What Is a Portfolio Loan?
A portfolio loan is a type of mortgage that a bank or lender keeps in-house—meaning they don’t sell it on the secondary market like conventional loans. This gives the lender flexibility in underwriting, structure, and borrower requirements.
Portfolio loans are often used by:
- Investors with 5+ financed properties
- LLCs or real estate holding companies
- Borrowers with complex or self-employed income
- Real estate entrepreneurs scaling aggressively
📌 Think of it as a custom loan designed for serious investors, not cookie-cutter homebuyers.
Key Benefits of Portfolio Loans for Investors
| Feature | Benefit |
| ✅ Flexible Underwriting | No strict Fannie/Freddie guidelines |
| ✅ Multiple Properties Allowed | Finance 5, 10, or even 50+ under one loan |
| ✅ LLC Ownership Friendly | No need to hold properties in personal name |
| ✅ Refinance & Consolidate | Simplify monthly payments, improve leverage |
| ✅ Unique Property Types OK | Mixed-use, small multifamily, STR-friendly |
Portfolio lenders often care more about the deal’s cash flow and your track record than your personal W-2 income or DTI ratio.
Portfolio Loan vs. DSCR Loan: What’s the Difference?
| Feature | Portfolio Loan | DSCR Loan |
| Property Count | 5+ properties grouped together | 1 property per loan |
| Ownership | LLC, LP, S-Corp allowed | LLC or individual |
| Income Qualifying | Based on global cash flow or P&L | Based on DSCR (property-only income) |
| Use Case | Scale or refinance portfolio | Buy/refi individual rentals |
| Loan Terms | Custom terms (5/10/15 year balloons) | 30-year fixed, ARM, IO available |
| Lender Type | Local banks, credit unions, non-QM | Non-QM investor lenders |
Both loan types serve investors—but portfolio loans are ideal when you want to package multiple properties into a single transaction.
When to Use a Portfolio Loan
✅ 1. You’ve Outgrown Conventional Lending
Most banks cap you at 10 financed properties. Portfolio loans break that ceiling.
✅ 2. You Want to Consolidate Loans
Simplify your finances by rolling several mortgages into one—often reducing your monthly debt load.
✅ 3. You Own Property in an LLC or Entity
Unlike conventional loans, portfolio lenders welcome business structures and offer non-recourse options.
✅ 4. You’re Buying 5+ Properties at Once
Perfect for bulk deals or portfolio acquisitions from tired landlords.
✅ 5. You’re Managing Diverse Asset Types
Have STRs, duplexes, and mixed-use properties? Portfolio loans handle complex blends better than Fannie Mae ever will.
Common Portfolio Loan Terms
| Feature | Typical Range |
| Loan Amount | $250,000 – $10,000,000+ |
| Property Count | 5 to 100+ properties |
| LTV | Up to 75–80% (lower for cash-out) |
| Credit Score | 660+ (700+ preferred) |
| Amortization | 15–30 years |
| Term Length | 5–10 years balloon common |
| Prepayment Penalty | Yes (often step-down) |
| DSCR Requirement | 1.20+ across the portfolio |
| Ownership Type | LLC, LP, Corporation, Individual |
📌 Some lenders offer blanket loans (one lien across all properties) or cross-collateralized options with flexibility for property substitutions.
Documentation Requirements
Unlike DSCR loans, portfolio lenders will often want to review:
- Full rent roll and operating P&Ls
- Property management agreements (if applicable)
- Entity formation documents
- Borrower balance sheet and liquidity proof
- Tax returns or business returns (in some cases)
- Global cash flow or borrower experience
Pro Tip: Track performance monthly across your rentals so you can present organized docs when applying.
Real-World Example
Investor Profile: Marcus owns 12 SFRs and 2 duplexes across Indiana and Kentucky, all in separate LLCs.
Need: Consolidate mortgages, lower payments, and pull out equity for a 15-unit acquisition.
Solution: Portfolio loan from a regional bank with:
- 70% LTV across portfolio
- 7-year term, 25-year amortization
- Monthly DSCR requirement of 1.25
- $1.6M total loan amount
- Funds available in 45 days
Result: Marcus simplified 9 loans into one, pulled $180K in equity, and bought his next deal—all without income docs.
Pros and Cons of Portfolio Loans
✅ Pros:
- Finance 5+ properties with one loan
- Customize terms based on strategy
- LLC-friendly and scalable
- Refinance, consolidate, or cash-out
- Accept more property types and locations
❌ Cons:
- Balloon payments common (5–10 years)
- May require higher reserves or DSCR
- Variable rates or rate resets
- More underwriting than DSCR loans
- Prepayment penalties often included
Final Thoughts
Portfolio loans are a must-have strategy for serious real estate investors. Whether you’re scaling to 10, 20, or 50 doors, they allow you to:
- Simplify financing
- Leverage equity across your portfolio
- Work within your LLC or business entity
- Avoid hitting ceilings with conventional lenders
As your portfolio grows, so should your funding strategy. Portfolio loans let you think—and finance—like a business.
Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
