Monday, February 16, 2009

How Many Properties Can I Finance?

Fannie Mae just announced that they are no longer limiting the number of properties that can be financed to 4. Effective immediately, the new limit is 10 financed properties. Of course, there are a number of restrictions. Following are the main changes:

-- You can now finance up to 10 properties.
-- For second home or 1-unit investment property purchases, the minimum down payment is 25% and the minimum credit score is 720.
-- For second home or 1-unit investment property refinances, the owner must have 30% equity in the property and a 720 credit score.
-- For 2-4 unit investment property purchases, the minimum down payment is 30% and the minimum credit score is 720.
-- For 2-4 unit investment property refinances, the owner must have 30% equity in the property and a 720 credit score.
-- No bankruptcies or foreclosures in the last 7 years.
-- No late payments on any mortgages in the last 12 months.
-- If rental income will be used to qualify, it has to show on the previous 2 years tax returns.
-- The reserve requirements have been raised to 6 months for all properties the borrower owns (if they own 5 - 10 properties).
-- This is only for purchases and limited cash-out refinances ($2,000 max cash out, and the new loan must be refinancing a loan that was used to purchase the property, or that was used to earlier refinance a loan that was used to buy the property).

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