Q: Although Fannie Mae has confirmed they will finance up to 10 properties they also said the lenders can use their own discretion in lending money for real estate investment properties.
We have found most lenders are sticking to the former four investment property rule even after getting 20 to 25 percent down in cash! I wonder if your readers are experiencing the same problem elsewhere.
A: As properties began collapsing in value, Fannie Mae and Freddie Mac instituted a rule that said no one borrower could own more than four properties, including a primary residence and a vacation home.
In 2009, that rule was rescinded and Fannie Mae and Freddie Mac agreed to buy loans for real estate investors who owned ten properties, including a primary home and vacation residence.
Although I hadn’t heard that some lenders prefer to follow more stringent guidelines and are sticking to the four-property rule, this is apparently the case in some areas.
Readers, are you finding that lenders don’t want to do investment property loans? And, if so, how are you financing these purchases?
I’ll publish the answers in an upcoming column.
Check out the eBook series on Real Estate Investing and the podcasts from the 2009 How To Profit Foreclosre Event