Before we get into the 2016 Guidelines Fannie Mae 5-10 Financed Properties, a little back story and introduction to this topic. Fannie Mae and Freddie Mac are the two main players who are Government Sponsored Enterprises or GSEs that regulate and implement the requirements needed for Conventional Loans. They create the guidelines that need to be followed by Conventional Loan Mortgage Lenders. Conventional Loans are also known as Conforming Loans because they must conform to Fannie Mae and Freddie Mac mortgage lending guidelines. If mortgage lenders wish to sell loans they write after closing to the secondary market they must conform to Fannie and Freddie guidelines. Before the market started to tank in 2007 and before the Great Recession of 2008, it was rather simple for real estate investors to obtain financing for their operations. With minimal doc and no-doc loans running wild, money was flowing easy as can be and then it all changed with the Great Recession and the ability for these loans collapsed and money being lent into these ventures nearly dried up all together while the industry tried to fix itself.
As a point of reference before the 2016 Guidelines Fannie Mae 5-10 Financed Properties, it is good to know the guidelines for Fannie Mae properties for less than 5 properties. Fannie Mae allows a property owner to finance up to 4 properties and as long as the owner has 4 properties or less, the standard conventional loan guidelines are in effect:
– Minimum FICO credit score of 620
– Maximum debt to income ratio of 45%
– Minimum down payment of 5% or 3% if first-time home buyer
– Second home down payment of 10%
– Investment home down payment of 15%
– 4 year waiting period after Chapter 7 Bankruptcy
– 2 year waiting period after Chapter 13 Bankruptcy
– 4 year waiting period after Short Sale
– 4 year waiting period after deed in lieu of foreclosure
– 7 year waiting period after foreclosure.
The 2016 Guidelines Fannie Mae 5-10 Financed Properties has change the way property investors can get funding for their projects and unlike before, Fannie Mae only has special guidelines for 5-10 properties, but no more than 10. If you wish to go over 10 properties you are going to have to find alternative funding such as hard money loans or private funding that is not regulated but a common resource for “house flippers” and real estate investors. 2016 Guidelines Fannie Mae 5-10 Financed Properties will still require the conventional loan guidelines looking at 2 years of income tax returns, 2 years of W-2s, two months of bank statements, but there is additional schedules needed for the additional properties. You will need real estate owned schedules, business tax returns, personal tax returns, copies of all leases for the properties that are owned, and a verification of all property tax and insurance for currently owned properties. 2016 Guidelines Fannie Mae 5-10 Financed Properties additional requirements:
– Limit to 10 properties total
– 25% down on properties 5-10
– No cash-out refinances on properties 5-10
– 30% equity required for all property types
– Minimum FICO credit score of 720
– No late mortgage payments in the past 12 months
– Mandatory 7 year waiting period after Bankruptcy OR Foreclosure
– 6 months of reserves for principal, interest, tax, and insurance on all properties
If you are an investor or are looking for more information on the 2016 Guidelines Fannie Mae 5-10 Financed Properties you definitely need to work with an experienced professional like myself. Give us a call any time day or night and we can get the process started. You can reach me at 888-900-1020, email at email@example.com, or visit www.loanconsultants.org for more details!