Investment property loans in Washington, DC

What a non-owner-occupied loan is

A non-owner-occupied property is one the borrower does not live in: a rowhouse bought to renovate and sell, a home leased by the year, a condo held as a rental, or a lot where a home will be built. Lenders treat these as business-purpose loans, and the rules differ from the mortgage on a primary residence.

Washington DC Fix and Flip Loans lends only on non-owner-occupied property. We are the DC-area division of Optimus Capital Corp, a nationwide lender that works only with real estate investors, and the division is run by Andrew Shanti, who has worked in lending and real estate since 2005 as a principal, executive and investor.

How to choose a lender for a DC investment property

The right lender depends on what you plan to do with the property. Three kinds of lender finance investment real estate, and each one approves the loan on something different.

Questions to ask before you pick a lender

DC property comes with rules that some lenders handle poorly. These questions sort out quickly who can close your deal.

• Will you fund the whole renovation? We finance up to 100% of the rehab budget at a 720+ score, paid in draws as work is finished.
• Do you understand the vacant property tax? DC taxes most homes, rented or owner-occupied, at $0.85 per $100 of assessed value. The risk for investors is the vacant and blighted classes: a property left unoccupied for 90 days or more must be registered, and is taxed at $5.00 per $100 if vacant or $10.00 if blighted. A property under construction with permits from the last 12 months, or actively listed for sale or rent, can qualify for an exemption, but you have to apply for it.
• Do you account for recordation and transfer taxes? DC charges a recordation tax and a transfer tax on each sale, each at 1.1% of the price under $400,000 and 1.45% at $400,000 or more. Buyers customarily pay the recordation tax and sellers the transfer tax, so on a flip you pay one when you buy and the other when you sell.
• Can you close with tenants in place? Most single-family homes, including a home with one accessory unit, have been exempt from DC’s Tenant Opportunity to Purchase Act since 2018, though elderly and disabled tenants under older leases keep their rights. Buildings with two or more rental units can carry TOPA rights that add notice periods before a sale can close.
• Do you understand the rental rules? In the District, a short-term rental license is available only to a person renting out their own primary residence, and a host-absent vacation rental is capped at 90 nights a year. Investment properties and second homes cannot be licensed, so most investor-owned homes in DC are underwritten on long-term rent. Maryland and Virginia counties set their own rules, and several also limit short-term rentals to a host’s primary residence.
• Will you check my personal income? We do not. There are no tax returns and no employment or debt-to-income review.
• Can I close in an LLC, and from out of state? Yes. We lend to LLCs and to out-of-state owners, and to foreign nationals on rental loans.
• How fast can you close? Rental loans take about 30 days, appraisal included. Fix and flip loans average up to 21 days and can close in about 7 days once title and insurance are ready.

What we finance in the DC area

• Fix and flip loans: up to 90% of the purchase price and 100% of the rehab at a 720+ credit score.
• DSCR rental loans for rowhouses, condos and small multifamily: up to 85% loan-to-value to buy and 80% on a cash-out refinance, fixed for 5 to 30 years.
• Ground-up construction loans: up to 90% of cost for experienced builders, with the lot included.
• Mid-rehab, portfolio and commercial loans for projects that need capital to finish, groups of rentals, and multifamily or mixed-use property.

For neighborhood notes and local rules, see hard money loans in Washington, DC.