What type of financing is commonly associated with investment properties?

Investment properties typically require financing that aligns with the nature of the investment and the associated risks. Conventional loans are most commonly used for this purpose as they are not insured or guaranteed by the government, allowing lenders to impose stricter requirements including credit scores, down payments, and income verification. These loans are usually offered by private lenders and can cater specifically to the needs of real estate investors looking to acquire properties for rental or resale.

On the other hand, FHA loans are designed for primary residences and promote homeownership among those who may not qualify for conventional financing due to lower credit scores or smaller down payments. VA loans are exclusively available for veterans and active military personnel to purchase homes for personal use, not investment properties. Student loans serve a completely different purpose, focusing on financing education rather than real estate investment. Therefore, conventional loans represent the most straightforward and widely accepted method of financing for investment properties.