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For owners of investment properties, the mortgage market is getting ugly. 

In its last act as a semi-private company, Fannie Mae updated its lending guidelines Friday, this time slapping new restrictions and additional fees on income-producing properties. 

The most impactful change is Fannie Mae's new, 4-property limitation. 

Based on the new rules, second home and investment property applications will be denied in underwriting if the mortgage applicant has, or will have, more than 4 properties financed in total. 

The former guidelines allowed for 10.

However, Fannie Mae has also clarified what it means to "own" a property, creating a loophole for real estate investors. Fannie Mae no longer considers a property "under ownership" if the property is held in the name of a corporation -- even if the borrower is the sole owner of the corporation. 

Real estate investors, therefore, can place their properties into an LLC and not be subject to Fannie Mae's 4-property limit.  Most real estate investors do this already for liability and taxation reasons, but now it's a good idea for mortgage approval reasons, too.

The other change from Fannie Mae does not have a work-around.  It's a set of new, mandatory loan fees, specifically assigned to investment property mortgages.

• Loan-to-value less than 75 percent : 1.75% loan fee
• Loan-to-value 75.01-80.00 percent : 3.00% loan fee
• Loan-to-value 80.01-90.00 percent : 3.75% loan fee

These new charges are separate from, and in addition to, Fannie Mae's already-costly loan-level adjustments.  Add the two together to calculate the total "mortgage fee".

And, lastly, there's the Fannie Mae changes for "Accidental Investors" -- mortgage applicants that couldn't sell their primary residence and, therefore, converted it to a rental.

Fannie Mae's new guidelines restrict owners of converted property from using its rental income on a subsequent mortgage application.  If the converted property's equity is less than 30 percent of the home's value, the entire monthly housing payment must be shown as a monthly income loss.

If the equity exceeds the 30 percent threshold, owners can use 75 percent of the rental income to qualify, and must also show 6 months worth of housing payments in reserves for both the rental property and the upcoming home purchase in order to qualify.

Now, long-term, it's unclear whether the government's Fannie/Freddie takeover will lead to a reversal in the mortgage guideline tightening we've seen this year, but it's sure done a good job in bringing mortgage down.

But as owners of investment properties are finding out, low rates only matter if you can qualify for them.

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Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.