maximum Fannie/Freddie loans now 10?

11 Replies

After speaking with a friend who is a loan officer at Wells Fargo he told me the maximum loans has been raised to 10 loans.  Does BP Nation have any info on this?  Are their any new restrictions on these?

@Jon Holdman  

I agree, once I passed 4 properties, the regular large banks backed away as it takes more work/time and they are set up to crank out the easy ones since they have so many "cookie cutter" mortgages.  They also constrain their people with rigid rules so they typically can't think outside the box to help.  I have a relationship with a loan officer from the last bank who went to work for a mortgage broker and has a network of investors that buy their loans so it's been a breeze now.  He has all my financials and knows my situation intimately so he knows he can sell my loans to any number of investors.  This allows me to bid and win with confidence that I'll close fast and easy.

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@Sean Ploskina  There are brand new guidelines that came out and the 10 unit rule no longer applies.  I'll be doing a BP blog post about this in the near future.  

The new guidelines allow for the loan amount to be calculated based on the PITIA (principle, interest, taxes, insurance, and association fees) divided by the monthly gross rental income.  That's it.  All you have to do is disclose employment and you the lenders usually won't even require paperwork. 

Fannie is ten. Generally a single lender will have a maximum amount financed for one person. So, for example my company may have the ability to do 10 loans for a single person but not in excess of 2m in total loans. If you can qualify, they are out there. 

Originally posted by @Derrick Lu :

If I co-sign to help a relative purchase a property, will Wells Fargo consider this 1 out of their maximum 10?

 Yes

Hello all, as an extension of this thread:

Is Fannie Mae's 10 property limit inclusive of property held and financed in LLCs with commercial mortgages? So do commercial mortgages count toward the total 10 property maximum that Fannie Mae is looking at?

Or is the 10 property mortgage limit the maximum for conforming mortgages only, and an investor could have, say, 20 commercial notes on SFRs if they want to, and still qualify to purchase a property in their own name as long as they have <10 confirming notes?

For example, if an investor has 3 properties (all 1-4 unit) held in their personal name with conforming mortgages, and 20 single family properties held in LLCs with non-conforming mortgages: could the person then buy a 4th property in their personal name and qualify for conforming financing? Or will the fact that there are 23 total properties on their tax return be grounds for denying the 4th property owned/financed in their personal name?

Thanks!

As a follow up, I did find more info on Fannie Mae's website. Perhaps this answers the question...
It seems that even if someone owns 100 single family rentals in LLCs, the person could still qualify for a 4th mortgage in their personal name. Is anyone able to confirm this? Thanks!

The following property types are not subject to these limitations, even if the borrower is personally obligated on a mortgage on the property:
****commercial real estate,
multifamily property consisting of more than four units,
ownership in a timeshare,
ownership of a vacant lot (residential or commercial), or
ownership of a manufactured home on a leasehold estate not titled as real property (chattel lien on the home).

Examples — Counting Financed Properties

The borrower is purchasing a second home and is personally obligated on his or her principal residence mortgage. Additionally, the borrower owns four two-unit investment properties that are financed in the name of a limited liability company (LLC) of which he or she has a 50% ownership. Because the borrower is not personally obligated on the mortgages securing the investment properties, they would not be included in the property count and the result is only two financed properties.

https://www.fanniemae.com/content/guide/selling/b2/2/03.html