Portfolio Lending - Suggested today by a credit union - advice?

Question

Hi everyone,

I am trying to get creative with financing, will be going into my seventh property that will be financed under my name. (I have done conventional financing for all my units, including one which is my primary).  I was told that on property 7, Freddie Mac and Fannie Mae require certain credit scores, which I am legit 2 points off from. So frustrating!  However I started looking around and calling banks and credit unions and someone told me about portoflio lending - Does anyone have any experience in this - easier to navigate? The Good - The bad? Any help would be GREATLY appreciated.

Thanks,

K-Man

Winston Covington · Answer

I had the same problem when I was purchasing property # 7 in my name.  There is definitely a Fannie Mae requirement which requires a higher mid Fico score than the previous 6 properties. You can either pay down / off some debt and go for a rapid rescore on your credit or shop around for a more lenient  lender.  I shopped around and found a local lender that would fund the deal at a slightly higher rate but still attractive.  It was for a nice single family home in a great neighborhood which produces some good positive cash flow.   So... in the big picture of life, it was well worth it.  Good luck.

Kuriakos Mellos · Answer

Hey Mason. Thanks for the insight. Is there anyone you would recommend?

Mason Hickman · Answer

@Kuriakos Mellos

The good: the lender will keep the loan in house so they can be a little more flexible with terms since they won’t be selling it off.

The bad: higher rates and look out to make sure they don’t want to cross-collateralize