Total Loans I Can Have At One Time

Real Estate Investor · MA · Member since 2008 · 22 posts · 0 votes

Good evening, I am hearing that you can only have 4 properties mortgaged at a time now, when it used to be 10. Is this true? If it is, what if I create an LLC and run the properties through the LLC. Any one know how to go about being able to aquire many properties?

Thanks

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Michael Shadow

Investor · Bellefonte, PA · Member since 2008 · 1k+ posts · 88 votes

18y

The new Fannie Mae and Freddie Mac rules limit you to 4 loans now. However these are only loans that are in their programs.

I believe you can get 4 through each. You can also check with local banks that hold their own notes, you can get as many there as they feel comfortable with.

You can also set up an entity (LLC or LLP) and get commercial loans. There are no limits there either, just as many as the bank in comfortable with.

-Michael

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C. Burris
Homeowner · Shreveport, LA · Member since 2008 · 52 posts · 0 votes
18y
where did you hear this in the first place, about the number of properties? Second why wouldn't you be using structure to conduct business?
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Fermin G.
OP
Real Estate Investor · MA · Member since 2008 · 22 posts · 0 votes
18y
A mortage broker told me that it is a new Fannie Mae rule. What do you mean structure? Any help would be great

thanks
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Michael Shadow
Investor · Bellefonte, PA · Member since 2008 · 1k+ posts · 88 votes
18y
The new Fannie Mae and Freddie Mac rules limit you to 4 loans now. However these are only loans that are in their programs.

I believe you can get 4 through each. You can also check with local banks that hold their own notes, you can get as many there as they feel comfortable with.

You can also set up an entity (LLC or LLP) and get commercial loans. There are no limits there either, just as many as the bank in comfortable with.

-Michael
2 Reply
Fermin G.
OP
Real Estate Investor · MA · Member since 2008 · 22 posts · 0 votes
18y
Michael thanks for the response. I am new at this. If I set up an LLC an go with a commercial loan they would use my personal gaurantee I suppose?

Thanks

Fermin
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Jon Holdman
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
18y
Freddie Mac, and probably Fannie Mae soon if not now, won't finance a property in an LLC at all.
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Fermin G.
OP
Real Estate Investor · MA · Member since 2008 · 22 posts · 0 votes
18y
I guess right now I do not have to worry about it because I have my home, one ren to own property and one I am rehabilitating right now. I plan on working my way into more than 10 properties in the next two years, if FMAE and FMAC do not finance more than 4 and banks will not finance a property in an LLC what have you guys been doing for financing?

Thanks
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Chris OToole
Real Estate Investor · Bayou Vista, TX · Member since 2008 · 58 posts · 8 votes
18y
I think everone is scared right now. Wait until property values start to level off and things will change. I have one that I am financing now but an going to start to look for owner finance oportunities.
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Gary Moore
Real Estate Investor · Anchorage, AK · Member since 2008 · 63 posts · 3 votes
18y
Originally posted by Wheatie:
Freddie Mac, and probably Fannie Mae soon if not now, won't finance a property in an LLC at all.

That is not the case for their commercial programs, which they both have.
My apartments in Spokane are financed with a Freddie Mac commercial loan serviced by BoA.

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Jason Phillips
Memphis, TN · Member since 2008 · 10 posts · 1 vote
18y
Find a local community bank that works with real estate investors as they can hold the loan in house under the LLC. these type of loans generally require a persoanal gurantee but it will not show up on your persoanl credit report
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Jeffrey K.
Real Estate Investor · Milwaukee, WI · Member since 2008 · 1k+ posts · 671 votes
16y
Is the loan limit back up to 10?
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Brian LevredgePro Member
Investor · Chattanooga, TN · Member since 2009 · 1k+ posts · 903 votes
16y
Originally posted by Jeffrey Koenig:
Is the loan limit back up to 10?

Yes it is, but with conditions. For more than four properties you need 6 months reserves per property, a 720 FICO or higher, and two years of tax returns for your existing props. They changed it back to ten about a year ago and I haven't paid attention to the guidelines since then but I'm pretty sure that's what they were.

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Jeffrey K.
Real Estate Investor · Milwaukee, WI · Member since 2008 · 1k+ posts · 671 votes
16y
Thats what I thought. My mortage guy at our local bank still thinks it is four, but he is a commercial guy so I will give him a break.
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Curt DavisBusiness Member
Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
16y
Keep in mind, though they have changed the rules back to 10 properties, you will still find most banks only doing 4 b/c that is what they feel comfortable.
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J ScottPro Member
Moderator
Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
16y
Nothing much to add except to reiterate what Curt said...

Banks need to be confident that they can sell the loans to Fannie/Freddie, so they will be very conservative with respect to doing any more than 4 loans, even though technically it's allowed.

It's just like FHA waiving their 90-day rule, but most banks still not wanting to underwrite FHA in less than 90 days...it's just a conservative mindset to ensure they don't get stuck holding the loan long-term.

Search around, and you'll find a lender who can do more than 4...
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Terica K.
Real Estate Consultant · Los Angeles, CA · Member since 2010 · 12 posts · 1 vote
16y
Banks are doing 4+ find a correspondent lender that is selling direct to fannie mae and they do not have any overlays.
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