In February 2009, Fannie Mae rolled back a rule that kept real estate investors from financing more than 4 properties at a time.  The limit raised the maximum number of financed properties to 10.

The program provides bona fide investors with an avenue to add to their respective real estate portfolios.

Yes, You CAN Finance With 5-10 Homes

In its official announcement, Fannie Mae said upping the financed-property limit would help stabilize housing nationwide.

"Experienced investors play a key role in the housing recovery", it said.

15 months later, however, finding a bank that offers the 5-to-10 Properties Financed program is proving to be a challenge. Unlike the traditional 15-year fixed rate mortgage, most lenders are not offering the 5-10 Properties program as a matter of policy.

It's cause for consternation among the real estate investment crowd.  Fannie Mae says it will buy the loans; banks should be willing to do them.

Why Some Banks Won't Offer The 5-10 Properties Program

So, why don't all bank participate in the 5-to-10 Properties Financed program?

The probable answer is that underwriting a 5-property-owning investor's mortgage application is hard work.  "Traditional" homeowners submit for loan approvals with just a basic W-2 and paystub for an approval.  Bona fide real estate investors, on the other hand, submit for approval with complex tax returns, REO schedules, and a ton more details to reconcile and verify.

It's far quicker to underwrite and approve a standard loan as compared to a 5-10 Properties program loan. However, both loans are valued the same when bundled for Wall Street securitization.

In other words, the 5-10 Properties program is more work for same profit.  It's no wonder most banks don't do it.

Thankfully, a few of the nation's banks will.  You just have to know where to find them.

And you have to meet their guidelines.

The 5-10 Financed Properties Program Criteria

In order to purchase and finance a home through Fannie Mae with more than 4 existing financed properties, investors must meet all of the following criteria:

• Own between 5-10 residential properties with financing attached
• Make a 25 percent downpayment on the property; 30 percent for 2-4 unit
• Minimum credit score of 720
• No mortgage lates within the last 12 months on any mortgage
• No bankruptcies or foreclosures in the last 7 years
• 2 years of tax returns showing rental income from all rental properties
• 6 months of PITI reserves on each of the financed properties

For refinances, loan-to-value is capped at 70% for all property types.

And then, as a last step to reduce fraud, Fannie Mae's multiple property program requires applicants to sign a 4506-T -- a form giving lenders permission to verify your submitted-with-the-loan tax returns against the official, IRS-filed version of the same.

Where To Get A 5-10 Properties Program Mortgage

If you own more than 4 financed properties and want to purchase a new one, or refinance one you already own, let your first call be to your personal loan officer or bank.  Ask for help -- you can't know if your banks offers the 5-10 Properties program until you ask.

If that call gets you nowhere, you call me directly or .

I offer mortgages for investors with 5 or more properties financed. I'd be happy to get you started.

UPDATE: The First Time Home-Buyer Tax Credit was expanded and extended. The information in this post may be inaccurate. Read the updated First-Time Home Buyer Tax Credit post instead.

The $8,000 First-Time Home Buyer Tax Credit expires December 1, 2009.

If you're planning to claim use the credit and haven't started looking for a home, your clock is officially ticking.  You must be closed on your new home on or before December 1.

Because purchase closings come 60-days standard, therefore, your $8,000 is in jeopardy unless you go under contract prior to October 2, 2009.  That's 73 days from now.

Use it or lose it, as they say.

The First-Time Home Buyer Tax Credit is part of the American Recovery and Reinvestment Act of 2009.  In it, Congress authorized a first-time homebuyer tax credit of up to $8,000 for home buyers meeting certain qualifying criteria.  The program's goal was to stimulate entry-level home purchases and, by most measures, the plan has been successful.

First-time home buyers accounted for about one-third of all home resales in May.

Now, the IRS definition of "first-time home buyer" may be different from what you expect.  According to the IRS, a first-time home buyer is anyone who has not owned a "main home" in the last 3 years with "main home" defined as a home in which a person has lived "for most of the time".  Main homes can include traditional homes, houseboats, trailers and other residence types.

For couples -- married or otherwise -- both home buyers must be first-timers to be tax credit-eligible.

Moreover, not every first-time home buyer is eligible for the $8,000 First Time Home Buyer Tax Credit.  Some notable exclusionary cases include first-time home buyers who:

• File taxes separately and whose adjusted gross income exceeds $95,000
• File taxes jointly and whose adjusted gross income exceeds $170,000
• Acquire property from a mother, father, spouse or child
• Acquire property from an entity in which they're a majority owner
• Acquire the home by gift or inheritance

And then, the First-Time Home Buyer Tax Credit may not deliver the full $8,000.

The tax credit is limited to 10 percent of the home's purchase price the it also diminishes as home buyer income rises.  Tax credit phase-outs start at $75,000 for homebuyers filing separately and $150,000 on joint returns.

Assuming you qualify, though, the good news is that it's easy to claim your tax credit.

1. Buy and close on a new, "main" home before December 1, 2009.
2. Submit IRS Form 5405 with your 2009 tax returns in April 2010.

That's it.

Meanwhile, the program does come with some gotchas.  For example, If you sell your home, or cease to use it as your "main home" within 36 months of purchase, the IRS will require a full payback.  There are only a few allowable exceptions to this policy and you shouldn't count on being granted one.

Not moving in the next 3 years? Don't worry about it.

If you're a first-time home buyer and have questions, you're welcome to anytime. I'll answer your questions and if I don't lend in your state, I can refer you to loan officers that I trust who do.

And lastly, please don't just take my word for it on tax issues. I am a loan officer and not an accountant. I can offer basic guidance, but paying a professional for expert advice is often the right way to go. If you don't have an accountant you trust or you're not using the free filing and tax audit services of TurboTax or something, call or email me for a recommendation.