Yes, some lenders will allow it. And your second question is: it depends. Is the return you can generate from the property (with tax benefits, appreciation, loan paydown and cash flow) more than the 7% borrowing rate? And does this investment make sense for you? If it does, then it might be worthwhile to pursue!!
Why will only "some" lenders allow it? I thought Fannie/Freddie determine these rules for conventional loans?
Fannie/Freddie provide the minimum requirements for conventional loans but each lender can add overlays or additional guidelines/requirements on top of the Fannie/Freddie ones.
Lender · CA · Member since 2018 · 638 posts · 393 votes
3y
Yes, some lenders will allow it. And your second question is: it depends. Is the return you can generate from the property (with tax benefits, appreciation, loan paydown and cash flow) more than the 7% borrowing rate? And does this investment make sense for you? If it does, then it might be worthwhile to pursue!!
Yes, some lenders will allow it. And your second question is: it depends. Is the return you can generate from the property (with tax benefits, appreciation, loan paydown and cash flow) more than the 7% borrowing rate? And does this investment make sense for you? If it does, then it might be worthwhile to pursue!!
Why will only "some" lenders allow it? I thought Fannie/Freddie determine these rules for conventional loans?
Yes, some lenders will allow it. And your second question is: it depends. Is the return you can generate from the property (with tax benefits, appreciation, loan paydown and cash flow) more than the 7% borrowing rate? And does this investment make sense for you? If it does, then it might be worthwhile to pursue!!
Why will only "some" lenders allow it? I thought Fannie/Freddie determine these rules for conventional loans?
Fannie/Freddie provide the minimum requirements for conventional loans but each lender can add overlays or additional guidelines/requirements on top of the Fannie/Freddie ones.