What is the maximum mortgages allowed by Fannie and Freddie?

I need an educated answer (As oppose to an urban legend)...
We all know that after the debacle, Fannie and Freddie went from 10 maximum allowed mortgages down to 4. Then Fannie went back to 10 mortgages allowed. Now I hear that they went down back to maximum four mortgages.
What is the real deal here?

Edited: 06/26/2010 at 09:12AM

Scott M.

Real Estate Investor · Rochester Hills, Michigan

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Icon_minipost Aug 01 '09, 11:32 AM

Still 10. 5-10 is a b getting done but still 10.

Edited: 06/26/2010 at 09:12AM

Eddie Ziv

Real Estate Investor · Studio City, California

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Icon_minipost Aug 02 '09, 03:40 AM

Originally posted by Scott M.

Still 10. 5-10 is a b getting done but still 10.

Thanks Scott. Do you know if any site where it is published?

Edited: 06/26/2010 at 09:12AM

Jon Holdman

Real Estate Investor · Denver, Colorado

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Icon_minipost Aug 02 '09, 04:09 AM

Here you go:

Updates to Multiple Mortgages to the Same Borrower Policy, Reserve Requirements, Reserves Definition, and Form 3170

Edited: 06/26/2010 at 09:12AM

Jon Holdman, Flying Phoenix LLC

Valerie Pedigo

· Panama (South of Buffalo), New York

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Icon_minipost Aug 02 '09, 04:31 AM

Jon posted directly from the source. Technically Fannie Mae allows 10, but several lenders' legal departments are still not going over 4.

Edited: 06/26/2010 at 09:12AM by Moderator

Eddie Ziv

Real Estate Investor · Studio City, California

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Icon_minipost Aug 02 '09, 07:03 AM

Originally posted by Jon Holdman

Here you go:

Updates to Multiple Mortgages to the Same Borrower Policy, Reserve Requirements, Reserves Definition, and Form 3170

Thanks, Jon. I actually have that link. I thought there was some update on that one, but I guess if nothing change that wouldn't be one.... :wink:

Edited: 06/26/2010 at 09:12AM

Jon Holdman

Real Estate Investor · Denver, Colorado

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Icon_minipost Aug 02 '09, 12:48 PM

Here's their announcements page. I looked through it quickly, and didn't see anything that looked like it revised this announcement. AFAIK, though, Freddie is still at four.

Edited: 06/26/2010 at 09:12AM

Jon Holdman, Flying Phoenix LLC

Jim Wineinger

Real Estate Investor · ten mile, Tennessee

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Icon_minipost Aug 02 '09, 01:03 PM

I noticed that this requirement, as stated in the link that was provided, is for investment properties of 1-4 units.

Fannie Mae is updating the policy that pertains to multiple mortgages to the same borrower.
Fannie Mae's current policy limits the number of one- to four-unit financed properties

What about a restriction for SFH. I have not looked at this close enough yet to see if it is also there.
Is this part of the 10 number where you can have 4 1-4units and 6 SFH

Edited: 06/26/2010 at 09:12AM

Valerie Pedigo

· Panama (South of Buffalo), New York

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Icon_minipost Aug 02 '09, 11:01 PM

Jawsette,

The requirements are for mortgaged properties. -Not properties owned.

The old policy limited financed 1-4 units to 4 when the new loan was secured by an investment or second home.

A SFR would be a 1 unit. So, the maximum total financed properties (including your primary) is 10 when you are looking to finance an investment or second home.

These guidelines do not apply if you are financing your primary residence. They also don't apply if your properties are free and clear.

Hope that helps,

Valerie

Edited: 06/26/2010 at 09:12AM

Jim Wineinger

Real Estate Investor · ten mile, Tennessee

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Icon_minipost Aug 03 '09, 05:01 AM

I would not have considered a SFR as a one unit investment, but I can see that possibility.

Therefore nothing has changed and you are still limited to 4 financed properties unless you can prove that you have the "reserves" in liquid cash to handle emergencies. Then you may have 5-10.

Edited: 06/26/2010 at 09:13AM

Valerie Pedigo

· Panama (South of Buffalo), New York

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Icon_minipost Aug 03 '09, 10:46 AM

Well, it's just that the reserve requirements are heavier for the 5-10 mark.

For up to 4 you need 6 months on the subject and 2 months on each additional financed property. For 5-10 it is 6 months subject/6 months each additional financed property.

Also - 720 mid FICO, 70-75% LTV depending on units and cash out.

Liquid reserves can also include semi-liquid reserves like 401K, IRA, CDs, whole life ins policies, etc.

Edited: 06/26/2010 at 09:13AM

Bernard Petersen

Property Manager · Genoa City, Wisconsin

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Icon_minipost Aug 03 '09, 10:58 AM

I'm currently maxed out at 10. What types of financing are other investors using past this mark?

Edited: 06/26/2010 at 09:13AM

Jon Holdman

Real Estate Investor · Denver, Colorado

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Icon_minipost Aug 03 '09, 11:51 AM

I was told that for 401k, IRA, etc., type assets, they count only 60% of the current value when figuring your assets. That sort of makes sense, since if you had to liquidate you'd have to pay taxes and penalties.

Edited: 06/26/2010 at 09:13AM

Jon Holdman, Flying Phoenix LLC

Valerie Pedigo

· Panama (South of Buffalo), New York

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Icon_minipost Aug 03 '09, 11:06 PM

I've never run into 60%. For conforming loans (which would include the Fannie Mae 5-10) semi-liquid assets are discounted to 70% of fully-vested value to account for the 10% penalty and 20% in taxes. More liquid investments, like mutual funds are like cash.

Edited: 06/26/2010 at 09:13AM

Eddie Ziv

Real Estate Investor · Studio City, California

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Icon_minipost Aug 03 '09, 11:56 PM

Originally posted by Bernard Petersen

I'm currently maxed out at 10. What types of financing are other investors using past this mark?

Some lenders clamp four properties together (mostly SFR) into a one commercial loan if the properties have enough equity in them but also have a sizable loans attached. Mortgage brokers who deal with wide variety of lenders are the ones that are most familiar with those kind of programs.

Edited: 06/26/2010 at 09:13AM

Jim Wineinger

Real Estate Investor · ten mile, Tennessee

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Icon_minipost Aug 04 '09, 09:04 AM

Originally posted by Eddie Ziv

Originally posted by Bernard Petersen
I'm currently maxed out at 10. What types of financing are other investors using past this mark?

Some lenders clamp four properties together (mostly SFR) into a one commercial loan if the properties have enough equity in them but also have a sizable loans attached. Mortgage brokers who deal with wide variety of lenders are the ones that are most familiar with those kind of programs.

Does this really work, considering the wording says properties financed, not number of loans financed?

"The limitation on the number of mortgages currently being financed applies to the total number of properties financed, not just the total number of mortgages sold to Fanie Mae."

This previous is a quote from the site previously given. So by putting 4 properties in one loan, you still have 4 properties financed even though you only have one loan.? Why would this not be correct?

Edited: 06/26/2010 at 09:14AM

Eddie Ziv

Real Estate Investor · Studio City, California

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Icon_minipost Aug 04 '09, 10:00 AM

Originally posted by jawsette

Originally posted by Eddie Ziv
Originally posted by Bernard Petersen
I'm currently maxed out at 10. What types of financing are other investors using past this mark?

Some lenders clamp four properties together (mostly SFR) into a one commercial loan if the properties have enough equity in them but also have a sizable loans attached. Mortgage brokers who deal with wide variety of lenders are the ones that are most familiar with those kind of programs.

Does this really work, considering the wording says properties financed, not number of loans financed?

"The limitation on the number of mortgages currently being financed applies to the total number of properties financed, not just the total number of mortgages sold to Fanie Mae."

This previous is a quote from the site previously given. So by putting 4 properties in one loan, you still have 4 properties financed even though you only have one loan.? Why would this not be correct?

I know personally one lender who does it. There are restrictions with regard to the proximity of those properties to each other. I think it is two miles or something . I'm not sure. Apparently, those lender found a loop hole where you can claim several rental properties in certain proximity to each other a one commercial entity.

Edited: 06/26/2010 at 09:14AM

Scott M.

Real Estate Investor · Rochester Hills, Michigan

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Icon_minipost Aug 04 '09, 11:46 AM

Bernard - some ideas are:

- Hard money loans
- Private money
- Small local banks or credit unions (who don't sell their loans)
- Mortgage bankers (who don't sell their loans)
- Seller financed deals - you can buy on a land contract or lease option etc....

Edited: 06/26/2010 at 09:14AM

Jim Wineinger

Real Estate Investor · ten mile, Tennessee

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Icon_minipost Aug 04 '09, 11:48 AM

If it can be done and they accept it, then great, but the wording did seem to preclude it.

Edited: 06/26/2010 at 09:14AM

Jeff N.

SFR Investor · Virginia Beach, Virginia

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Icon_minipost Oct 22 '11, 03:57 AM

Anyone have any luck recently getting your 5 through 10 mortgage? Just curious what has changed the past two years and what banks are friendly to these.

Below is the guidelines Jon posted a few years ago:

https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0902.pdf

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