In 2009, Fannie Mae rolled back a mortgage rule that prevented real estate investors from financing more than 4 properties at once.
At the time, investors were limited to 4 properties financed, which included their primary residence.
Today, the maximum number of allowable, simultaneously financed properties is 10. You wouldn't know it, though -- few banks actually offer the program.
This article describes how to get a mortgage at today's mortgage rates if you have 5-to-10 homes in your portfolio.Click to see today's rates (Oct 25th, 2016)
In February 2009, Fannie Mae said it would up the maximum financed-property limit from four to ten to help stabilize the U.S. housing market.
"Experienced investors play a key role in the housing recovery", it said.
This is a truth.
Real estate investors buy foreclosed homes, multi-unit properties, and vacant condos as a means to build wealth long-term.
And now, with rents out-gaining the rise in home prices in U.S. cities such as San Francisco, California; Fort Worth, Texas; and Seattle, Washington, investor types are clamoring for good homes -- especially with financing so cheap.
15-year mortgage rates with points are below 3 percent.
Despite market options, though, investors can find it hard to find banks which offer financing for people with more than 4 properties already financed.
Even seven years later, Fannie Mae's 5-10 Properties Financed program remains a niche product.
Maybe you've been turned away by your bank, too.
So, why don't all banks participate in the 5-10 Properties Financed program? The probable answer is that underwriting a 5-property-owning investor's mortgage application can be very hard work.
As compared "traditional" homeowners who submit for loan approval with just a W-2 and pay stub, a seasoned real estate investor is asked to provide complex tax returns, complete REO schedules, and extra detail for every home underwritten and approved.
Reviewing paperwork takes time. Sometimes, a lot of it.
Furthermore, investors with 5 or more properties financed are more likely to hold title to their homes in a non-standard fashion.
This, too, creates "extra work" underwriting which slows down the approval process for the subject home and for every other loan with the bank, too.
As compared to a standard purchase loan, loans for investors with more than 4 homes financed generates the same bank to the bank but with more man-hours required to approve and additional fraud risk post-closing. It's no wonder most banks avoid them.
Note : Most banks, not all. You have to know where to find a 5-to-10 Properties loan. Then, you have to meet its guidelines.Click to see today's rates (Oct 25th, 2016)
To finance a home via Fannie Mae's 5-10 Properties program, the following criteria must be met with no exception :
That's pretty much it. Tough, but not too tough.
You can even combine the Delayed Financing Rule with the 5-10 Properties program to take cash-out from a home purchased free-and-clear at auction or otherwise.
Your bank may not give loans on the 5-10 Properties Program, but don't let them tell you that it can't be done. It can.
Get today's live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.Click to see today's rates (Oct 25th, 2016)
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2016 Conforming, FHA, & VA Loan Limits
Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)