Back in 2009, Fannie Mae raised their limit on the number of financed properties that an investor could have before becoming ineligible for new financing from 4 to 10. Most lenders, however, kept their own limit on maximum number of financed properties at 4.

At the Ethical Homes team, however, we broker our loans through dozens of wholesale lenders, which means that we have multiple sources of funding for investors who do already have a number of financed properties and are looking to purchase their next property, be it their fifth or their tenth.

In addition, we have portfolio lending partners who can often assist established investors who already have a high number of financed properties, by allowing them to refinance loans on up to 10 properties into a single “blanket loan” that will not be reported to credit agencies or count towards the investor’s limit on number of financed properties with Fannie Mae; after refinancing into a blanket mortgage of that sort, these high-volume investors will be under the Fannie Mae limit and can then obtain conventional financing to acquire new properties at great current rates.

Interested in exploring your options for financing investment properties when you already have 4 or more properties in your portfolio? Contact us and we’d be glad to help you out.

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In early 2008, Fannie Mae & Freddie Mac announced that they were effectively limiting the number of loans that a single investor could have on real estate to 4. In 2009, under pressure from both the private sector and government regulators trying to deal with the recession, Fannie Mae increased that limit back up to 10, although it imposed some serious restrictions on investors who fall into the 5-10 property category. In its official announcement, Fannie Mae said upping the financed-property limit could stabilize housing, noting that “[e]xperienced investors play a key role in the housing recovery”.

Under Fannie Mae’s new guidelines, investors must meet the following criteria before being approved for a conventional mortgage on their fifth or subsequent financed property:

• Owns between 5-10 residential properties with financing attached (including the subject property in question).
• Has at least 25 percent equity (i.e. at least a 25% down payment if purchasing) in the property, or 30% equity if the property is a 2-4 unit building.
• Has a minimum credit score of 720
• Has not made a late payment on any mortgage within the last 12 months
• Has not declared bankruptcy or been foreclosed on in the last 7 years
• Can provide 2 years of tax returns showing rental income from all rental properties
• Has enough reserve assets to cover 6 months of PITI payments on all of the financed properties

There aren’t that many investors who can meet those guidelines, especially the one requiring enough reserve assets to be able to cover the mortgage payments on all of the financed properties for at least 6 months. If you do meet those criteria, already have 4+ investment properties, and want to explore your options for purchasing or refinancing an investment property, contact us and we’d be glad to help you out.

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Finding a property to purchase, especially in today’s market, can be an intimidating experience. Finding an agent you’re comfortable with can be even more difficult. My experience working with Sweth has been terrific. He is attentive without being pushy, and patient when my decision-making process seems interminably slow. Whether it’s information about specific properties, general market comparisons, or referrals to various lenders for advice, Sweth is always willing to share his wealth of knowledge. I’d be happy to recommend him to anyone who’s interested in buying or selling property in the DC Metro area.

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