Comments on: More Fannie Changes for Investment Properties and Second Homes http://raincityguide.com/2008/07/31/more-fannie-changes-for-investment-properties-and-second-homes/ Seattle's Leading Resource for Real Estate Information Sun, 08 Nov 2009 01:47:42 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: Rhonda Porter http://raincityguide.com/2008/07/31/more-fannie-changes-for-investment-properties-and-second-homes/#comment-341538 Rhonda Porter Thu, 09 Jul 2009 03:56:07 +0000 http://raincityguide.com/?p=2042#comment-341538 <p>Thanks for <a href="http://www.raincityguide.com/2008/07/31/more-fannie-changes-for-investment-properties-and-second-homes/#comment-341116">confirming my previous answer</a>...which you all ready did the research on. </p> <p>Guidelines CAN and DO change often these days...I'll do my best to stay on top of them here at RCG.</p> <p>Credit scores do make a difference with all forms of conventional financing.</p> Thanks for confirming my previous answer…which you all ready did the research on.

Guidelines CAN and DO change often these days…I’ll do my best to stay on top of them here at RCG.

Credit scores do make a difference with all forms of conventional financing.

]]> By: Anon http://raincityguide.com/2008/07/31/more-fannie-changes-for-investment-properties-and-second-homes/#comment-341536 Anon Thu, 09 Jul 2009 03:42:04 +0000 http://raincityguide.com/?p=2042#comment-341536 I am being told currently - unless guidelines change - we do not have to worry about the 30% equity, so long as we are out of our current primary residence that is being converted to a rental for 6+ months, and we have sufficient income to carry the new house, plus the 25% of the fair market rent of the converted property we don't get credit for (except, following the filing of a tax return, I think the lenders or at least the particular lender we have in mind, a large national bank, then go by the actual Schedule E figures). Our lender is almost certainly using AVM for rental property value, if they even care about it after 6+ months (a drive by or stop in would be more than welcome in our case, since every Realtor adds at least $25K to their estimate after viewing, and their estimates come in $40-90 over AVM [AVM was recently disclosed to us in the process of refi'ing current mortage with same lender]). If it makes a differnce, we both have ~800 FICOs. - Anon I am being told currently – unless guidelines change – we do not have to worry about the 30% equity, so long as we are out of our current primary residence that is being converted to a rental for 6+ months, and we have sufficient income to carry the new house, plus the 25% of the fair market rent of the converted property we don’t get credit for (except, following the filing of a tax return, I think the lenders or at least the particular lender we have in mind, a large national bank, then go by the actual Schedule E figures). Our lender is almost certainly using AVM for rental property value, if they even care about it after 6+ months (a drive by or stop in would be more than welcome in our case, since every Realtor adds at least $25K to their estimate after viewing, and their estimates come in $40-90 over AVM [AVM was recently disclosed to us in the process of refi'ing current mortage with same lender]). If it makes a differnce, we both have ~800 FICOs. – Anon

]]> By: Rhonda Porter http://raincityguide.com/2008/07/31/more-fannie-changes-for-investment-properties-and-second-homes/#comment-341534 Rhonda Porter Thu, 09 Jul 2009 03:31:21 +0000 http://raincityguide.com/?p=2042#comment-341534 <p>I once had a transaction where the home owners lived in Alaska and bought a home in Des Moines WA. The underwriter would not treat it as a second home which floored me...it was not a conventional mortgage...to my knowledge, it was not sold to Fannie/Freddie...however, it passed all the u/w guidelines. The u/w did not believe that the home in Des Moines was going to be used for vacation purposes...she won. (Due to reasons that we had to go through this lender at that time).</p> I once had a transaction where the home owners lived in Alaska and bought a home in Des Moines WA. The underwriter would not treat it as a second home which floored me…it was not a conventional mortgage…to my knowledge, it was not sold to Fannie/Freddie…however, it passed all the u/w guidelines. The u/w did not believe that the home in Des Moines was going to be used for vacation purposes…she won. (Due to reasons that we had to go through this lender at that time).

]]> By: Rhonda Porter http://raincityguide.com/2008/07/31/more-fannie-changes-for-investment-properties-and-second-homes/#comment-341533 Rhonda Porter Thu, 09 Jul 2009 03:28:47 +0000 http://raincityguide.com/?p=2042#comment-341533 <p>Chris, it may not be just a drive by, the underwriter could call for: an appraisal, AVM or Broker Price Opinion (as stated in my post). It's the lender/underwriter's call. And...Anon's talking about being out of his residence for at least 6 months.</p> Chris, it may not be just a drive by, the underwriter could call for: an appraisal, AVM or Broker Price Opinion (as stated in my post). It’s the lender/underwriter’s call. And…Anon’s talking about being out of his residence for at least 6 months.

]]> By: Chris Opstedal http://raincityguide.com/2008/07/31/more-fannie-changes-for-investment-properties-and-second-homes/#comment-341532 Chris Opstedal Thu, 09 Jul 2009 03:11:20 +0000 http://raincityguide.com/?p=2042#comment-341532 Opinion and gut feel are now UW guidelines! does gut have two "T"s Opinion and gut feel are now UW guidelines! does gut have two “T”s

]]> By: Chris Opstedal http://raincityguide.com/2008/07/31/more-fannie-changes-for-investment-properties-and-second-homes/#comment-341531 Chris Opstedal Thu, 09 Jul 2009 02:55:24 +0000 http://raincityguide.com/?p=2042#comment-341531 Anon, This is my understanding on this. If you are leaving your primary res you will need 30% equity with proved with a drive by appraisal to use 75% of proposed new rent/lease income regardless if it has been rented for 6 months because underwriters now want to see income showing up on tax returns before you can get any credit if you have less than 30% equity. If one does not have the 30% equity than plan on qualifing with both payments Anon,
This is my understanding on this.

If you are leaving your primary res you will need 30% equity with proved with a drive by appraisal to use 75% of proposed new rent/lease income regardless if it has been rented for 6 months because underwriters now want to see income showing up on tax returns before you can get any credit if you have less than 30% equity. If one does not have the 30% equity than plan on qualifing with both payments

]]> By: Rhonda Porter http://raincityguide.com/2008/07/31/more-fannie-changes-for-investment-properties-and-second-homes/#comment-341530 Rhonda Porter Thu, 09 Jul 2009 02:49:53 +0000 http://raincityguide.com/?p=2042#comment-341530 <p>And as I said before, it has to pass a "smell test" with the underwriter even if the property meets all the criteria. </p> And as I said before, it has to pass a “smell test” with the underwriter even if the property meets all the criteria.

]]> By: Chris Opstedal http://raincityguide.com/2008/07/31/more-fannie-changes-for-investment-properties-and-second-homes/#comment-341529 Chris Opstedal Thu, 09 Jul 2009 02:42:44 +0000 http://raincityguide.com/?p=2042#comment-341529 Pam here is some more info from FNMA guidelines. Second homes must be one-unit properties that are not subject to time-sharing and must meet the following criteria: • Property must be in such a location as to function reasonably as a second home (i.e. remote in distance from the borrower’s primary residence). • Be suitable for year round occupancy • Be available for the borrower’s exclusive use and enjoyment • Must not be subject to any rental pools or agreements that require the Borrowers either to rent the property or give a management firm control over the occupancy of the property. Pam here is some more info from FNMA guidelines.

Second homes must be one-unit properties that are not subject to time-sharing and must meet the following
criteria:
• Property must be in such a location as to function reasonably as a second home (i.e. remote in distance
from the borrower’s primary residence).
• Be suitable for year round occupancy
• Be available for the borrower’s exclusive use and enjoyment
• Must not be subject to any rental pools or agreements that require the Borrowers either to rent the
property or give a management firm control over the occupancy of the property.

]]> By: Pam http://raincityguide.com/2008/07/31/more-fannie-changes-for-investment-properties-and-second-homes/#comment-341525 Pam Thu, 09 Jul 2009 01:43:11 +0000 http://raincityguide.com/?p=2042#comment-341525 I will seek advise from them. Thank you Rhonda. I will seek advise from them. Thank you Rhonda.

]]> By: Rhonda Porter http://raincityguide.com/2008/07/31/more-fannie-changes-for-investment-properties-and-second-homes/#comment-341523 Rhonda Porter Wed, 08 Jul 2009 23:21:40 +0000 http://raincityguide.com/?p=2042#comment-341523 <p>Pam, I highly recommend you run the scenario by your mortgage professional. A home must meet other criteria to meet guidelines of being a second home too which can sometimes wind up being the underwriters call. </p> Pam, I highly recommend you run the scenario by your mortgage professional. A home must meet other criteria to meet guidelines of being a second home too which can sometimes wind up being the underwriters call.

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