Conventional Lending Question

9 Replies

A quick question for all the Fannie Mae/Freddie Mac conventional mortgage originators out there.

I have six loans in my personal name and my wife has five in her name. We are buying property #12 as a second home and applied jointly for funding for the first time. The lender is telling us that even though the other 11 are now treated as jointly for #12 and they are denying the loans based upon the fact that we are not allowed to have more than 10 loans.

She is trying to now underwrite one of us singly to see if we qualify, but we were supposed to close in four days and it would be great to save her the time and hassle and close on time.

What say you?

Hi Andrew,

This seems a little strange. As long as your wife is not obligated to your 6 loans and they are strictly in your name then this shouldn't be an issue. I have done loans that one person has 9 properties and the other has 2 and they can still get a loan together. 

Is your lender saying that you both are now obligated to the 11 properties you own already? Instead of it being split 6 and 5? To me this doesn't seem to add up. 

@Brandi Sharp actually it is straight Fannie Mae guidelines that’s this is correct. Since they are both on the loan Fannie Mae says all properties commutative are counted. This would not the case if it was a primary residence.

@Andrew M. Here are the guidelines for your case. Unfortunately the underwriter is correct. You will have to find another way to finance.

@Stephanie P.

We are using this particular property as a second home, so out of an abundance of caution, we put both names on the loan application to secure a better DTI. It came down to laziness, honestly, to do so since we were both well under our 10 loans individually and didn't know it would be a problem.

Come to find out that it would have worked with one of us and not both, but at this point we’d need to start the entire underwriting process over again and that could take a month to close. Trying to avoid that extended timeline.

Yes as it appears to me the route would be to remove one of you from the loan. They are telling you it's another 30 days to send it back to underwriting with just removing one borrower? If you are already conditionally approved, it shouldn't take much time at all to send it back to ensure the numbers work with just one of you. As long as they have all the documentation I wouldn't anticipate it to being even close to a 30 day extension. 

@Andrew M. if this is a second home purchase in CO, I can deff get that closed way sooner than months. Try like 3 weeks or less if you already have most of the stuff done.