Friday, December 5, 2008

New Fannie Mae & Freddie Mac Policy - 4 Financed Properties...AND THAT'S IT!

On December 1, a new Fannie Mae / Freddie Mac underwriting policy went into affect. Up until now, investors were able to obtain financing for up to 8 properties...meaning that you may only have up to 8 properties that are financed at the same time (not purchased simultaneously, but financed at any given time). So basically if an investor owned 7 properties that had mortgages, and wanted to finance another one, under old old guidelines, they could purchase that property given the fact they met all of the other lending guidelines.

Well, now that number has dropped to 4. That's right - FOUR. Basically this rule prohibits an buyers from financing for a 5th property no matter how much money is put down or how much income documentation is provided. There no exceptions for assets, or history of success as a property owner or real estate investor.

How do you get around this rule? Pay cash. Pool your money with other investors. You can still own just can not take out a loan for another one if you have 4 properties already financed.

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