Conventional Financing Limit Question

7 Replies

I've read that there is a limit to the amount of mortgages an individual can carry (I think it's 5?). My question is does this limit apply in the same way to multi-family properties? So if the limit is 5, could an individual own 5 four-plexes (20 doors)?

The limit is 10. Some banks will tell you the limit is 4, but that would just be the guidelines of that specific bank. If they tell you 4 or 5, you can find a different lender who should lend up to 10.

I haven't looked into multifamily, but my understanding is anything 4-plex and less is considered residential and therefore is under the same guidelines as a SFH.


It's generally 10 mortgages, but that only applies to insured mortgages.  Conventional mortgages are not capped by rule.  However, most lenders will not underwrite more than 10 to a single investor.  That is designed to mitigate/limit their risk and is particularly true of the large/high volume originators who are going to package and sell the loans they originate.  It is less of an issue with small, local, portfolio based lenders who service their own loans on their portfolio.

Also, any property with 1 - 4 units is considered the same as a SFR for lending purposes, so the number of doors is irrelevant.

You can own 10 4-plexes, if you can find them. Or, 7 SFR & 3 4-plexes. You get the idea.

@Hattie Dizmond  Thanks for clarifying that. I thought 10 was an actual federal guideline. I understand banks not wanting to underwrite more than 10 loans to someone, I just thought that was the guideline they had to follow. 

@Hattie Dizmond  Thanks for sharing that link. Didn't know you had to have 6 months of reserves for each property either. This has been an education night, so that's good!

Fannie Mae and Freddie Mac apply the 10 mortgaged property limit. Not mortgages. Mortgaged properties. So a first and a HELOC on one property only counts as one mortgaged property. Those are "conventional loans".

If you go with commercial loans, which a few banks do offer on small residential properties, there is no strict limit.  Some banks may impose their own limits, some may not.