Is there a different type of financing for a traditional mortgage vs. an investment property?

You can also buy income property with a self directed IRA, so instead of stocks you can buy something local where you can kick the tires.

For a primary residence you can finance the home with a FHA loan with only 3.5% downpayment or a conventional loan with as little as 5% downpayment. An investment property can only be financed with a conventional loan and requires 20% downpayment. The interest rate for an investment property will be slightly higher than a primary residence. Financing for investment properties also requires cash reserves. This is typically 6 months of the proposed payment liquid in savings. NMLSR 715164