Investors, Say Hello to Fannie & Freddie

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Fannie Mae & Freddie Mac Mortgages

Nearly every Bank, Credit Union, Mortgage Banker and Mortgage Broker can offer the loan products backed by the federal charted companies Fannie Mae and Freddie Mac. Investors that have good credit, can document income and are ready to put money down can acquire a loan from either Freddie or Fannie. Investor’s utilize this loan because they are the most competitive loans when it comes to interest rates and closing. These loans are underwritten through an automated system which takes credit, assets, loan to value, and debt ratios into consideration. Because the loans are underwritten by a computer there are certain compensating factors that can help approve your loan. Let’s say Joe investor has ok credit, high debt ratios (60%), but has lots of reserves and can put 30% down. They could approve this borrower because there are assets reserves to compensate for his high debt ratios and just ok credit. Believe it or not Freddie Mac even has a Stated income program. That’s right, a federal charted company has a stated income program. It truly is designed for self employed borrowers, but salaried individuals can use it as well.

Below is a thumb print of what you can expect from Freddie Mac on investment properties:

Full Documentation: Ideal for borrowers looking for conforming loan amounts who have good credit and assets:
1 unit: 90% LTV / 85% 1st Lien / 90% TLTV – $417,000
2 unit: 90% LTV / 85% 1st Lien / 90% TLTV – $533,850
3 unit: 75% LTV / 70% 1st Lien / 75% TLTV – $645,300
4 unit: 75% LTV / 70% 1st Lien / 75% TLTV – $801,950
Cash Out 1 unit: 85% LTV / 80% 1st Lien / 85% TLTV – $417,000
Cash Out 2 unit: 85% LTV / 80% 1st Lien / 85% TLTV – $533,850
Cash Out 3 unit: 70% LTV / 65% 1st Lien / 70% TLTV – $645,300
Cash Out 4 unit: 70% LTV / 65% 1st Lien / 70% TLTV – $801,950
Not available IO

Stated Income: Ideal for self-employed/salaries borrowers with excellent credit. No tax returns or other written verification of income. Assets are required to be verified.

1 unit: 90% / 90% – $417,000 – 720 75% / 90% – $417,000 – 680
2 unit: 90% / 90% – $533,850 – 720 75% / 90% – $533,850 – 680
3 unit: 80% / 80% – $645,300 – 720 75% / 80% – $645,300 – 700
4 unit: 80% / 80% – $801,950 – 720 75% / 80% – $801,950 – 700
Cash Out 1 unit: 75% / NA – $417,000 – 680
Cash Out 2 unit: 75% / NA – $533,850 – 680

A-minus; Ideal for borrower who don’t meet “A” paper credit standards. Allow borrowers to obtain a conventional product at a slightly higher rate.

1 unit: 90% LTV/85% w/sub. financing/90% TLTV – $417,000
2 unit: 90% LTV/85% w/sub. financing/90% TLTV – $533,850
1 unit:* 90% LTV/85% w/sub. financing/90% TLTV – $417,000
2 unit:* 90% LTV/85% w/sub. financing/90% TLTV – $533,850
3 unit:* 75% LTV/70% w/sub. financing/75% TLTV – $645,300
4 unit:* 75% LTV/70% w/sub. financing/75% TLTV – $801,950
Cash Out 1 unit:* 85% LTV/80% w/sub. financing/85% TLTV – $417,000
Cash Out 2 unit:* 85% LTV/80% w/sub. financing/85% TLTV – $533,850
*Borrowers may not own any other financed investment properties

This is great news for the investors that rely on the Fannie Mae and Freddie Mac loan products to finance your properties. Rates are down and Congress has passed legislation to increase the minimum loan about. The details are currently be worked out but some figures are has high has $739,000 in some markets. This increase will only be for 2008

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  1. Pingback: Investors, Say Hello to Fannie & Freddie | The Long List of Odysseus Medal Nominees | Realtors and real estate, mortgages, lending, investments

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