Fannie Mae Increases the Allowance for Financed Properties Owned
Rhonda Porter on 02 6, 2009
It is really challenging to keep up with our constant changing guidelines. Just this morning I was commenting over at the Seattle PI Real Estate Blog about the conventional guidelines permitting only four financed properties at a time for a borrower (more than four financed properties–no conventional mortgage for you!). Moments ago, I received this updating Fannie’s guidelines (Announcement 09-02):
Multiple Mortgages to the Same Borrower
To support prudent lending for housing investment, Fannie Mae is changing our current limit of four financed properties per borrower. We will allow five to ten financed properties per borrower, with certain eligibility and underwriting requirements, including a 720 minimum credit score and 70-75% maximum LTV/CLTV/HCLTV (depending on the transaction and property type). The requirements apply to any loan being delivered to Fannie Mae, regardless of whether Fannie Mae is the investor on the borrower’s other mortgages.
Just a reminder that any mortgage guidelines that you find on the internet may no longer apply!
I better hop on over to the PI and correct my comment from this morning. 
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13 Responses to “Fannie Mae Increases the Allowance for Financed Properties Owned”
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Now if they would get rid of all the other LLPA’s they keep adding, we might be getting somewhere. I find it amazing that Fannie/Freddie are so clueless they can’t figure out how detrimental some their changes are to the current situation and contributing to making matters worse.
Russ, I completely agree. I understand the LTV/credit score brackets…but let’s make them bigger groups. You can’t tell me that someone with a mid score of 739 is worse borrower than someone who’s 740…well I guess Fannie is telling me that!
The hits on investment properties need to lighten up too. Let the u/w guidelines be tough…but if someone can jump through the hoops and qualify, let’s not beat them up with Fannie’s add’s to rate.
[...] However, Fannie Mae has just increased the number of allowable conventional loans, now allowing from 5 to 10 with a 720 minimum credit score. Check out more info here from Rhonda Porter at Rain City Guide. [...]
Now that Fannie has increased the # of financed properties you can have,
what lender offers this? I have checked with Wells Fargo and several
others and they still say max. # of properites is 4.
Amy, that’s thanks to lenders underwriting overlays. If your home is located in Washington State, I have a resource.
[...] in February 8th, 2009 Posted by Jacquie in Banking industry, Loans I have to thank Rhonda over at Rain City Guide for breaking this news to me. It looks like on Friday, Sallie Mae revised its rules and now [...]
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Rhonda,
Overall, it’s a good sign that Fannie Mae is starting to ease on its mortgage loan guidelines. Even though the requirements on this one still remain rather tough, it ought to attract more investors to the real estate market. We really need to stimulate demand that would then absorb slowly but surely the excess inventory.
Esko, the reserves required for investment property/second homes are still pretty steep with Fannie Mae… I wouldn’t call this a real easing. It is good that they increased the number of allowed units because investors with more than 4 financed properties (it could be 1-owner occ/1-vacation home and 3 rentals) were not able to refinance any of their properties. Lower mortgage payments will help some folks through these economic challenging times. And, as you mentioned, there are some opportunities for well qualified investors.
Great news, but which lenders have adopted this in their internal guidelines?
I have five properties: my residence and four investment (rental) properties. All of them have mortgages. As it stands now, it appears that I cannot do any cash-back refinances that involve Fannie Mae.
Question: If I pay off one of the properties, and own that property free and clear, I will have five properties, but only four financed properties. So at that point can I do a cash-back Fannie Mae refinance on one of the four financed properties?
Neil, sorry for the late response…not sure if your comment became trapped in a spam bin. I believe you would be able to do the cash-out refinance at the time you only have for mortgages on your properties. With non-owner occupied, be prepared for the underwriter to fully scrutinize the transaction–especially if you’re layering risk with a cash-out refi.