What is a portfolio loan/ lender?

Question

Bob Okenwa · Answer

@Toan Hoang

A portfolio loan is a loan that the lending institution keeps on its books (in it's portfolio), rather then selling to Fannie Mae. These kinds of loans do not need to adhere to Fannie Mae standards and can have terms that may be a little more flexible.

Stephanie P. · Answer

Toan

You're getting a mixed bag of answers because the term "portfolio" is used in a variety of instances.

• A portfolio loan is one that is kept on its books by a bank, a correspondent lender or a private lender.  They would keep it on their books because Fannie Mae or Freddie Mac will not guarantee it for one reason or another
• A portfolio loan is a loan that encompasses multiple properties.  Also known as a "blanket loan".  This also is not guaranteed by Fannie Mae or Freddie Mac

Try to stick to conventional loans for your first 10 properties if you can.  The rates and fees are less expensive.  If you don't qualify for one reason or another, then move into portfolio or even small balance commercial loans.

Stephanie

Chris Martino · Answer

Hi @Toan Hoang, a quick google search in your area will find a bunch of portfolio lenders. Just explain to them what you are looking to achieve and you should be able to find a few to compare.

Also if you have the choice to use a conventional mortgage I would still continue using them unless there is an unusual situation with the property and you are unable to obtain one. The rates on the conventional ones will most likely be less.

Meredith Fox · Answer

Theoretically they can do 7 as one portfolio loan. If you want to do more you'd do them separately. If you're buying them in your own name you can do 4 under normal Frannie/Freddie requirements. You can do up to 10 separately with more stringent credit/income requirements. In my experience most people will do a Frannie/Freddie for the first 10 loans if they have good credit/income and then convert the 10 into a portfolio. Hopefully that gives you enough capital to keep buying.

Meredith Fox · Answer

@Toan Hoang Portfolio loans tend to be done as a group of say 10 houses. You're refinancing them all in once into one loan. I don't know of any banks that will do a portfolio loan on a just one SFH but it doesn't mean there aren't any.

Hans M. · Answer

@Stephanie P. pretty much nailed it.

Meredith Fox · Answer

You'll want to look for a local bank to do a portfolio loan. Big banks like to resell your loan at closing. Interest rates are higher and it can be expensive to set up. You have to have each property appraised and pay all the title fees. I like them for buy and hold. It's a lot harder to sell one of the assets in the group since it's contributing collateral to the overall loan.

What is a portfolio loan/ lender?

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