Peoria, IL · Member since 2011 · 365 posts · 182 votes
I've hit my 10 property limit with Fannie Mae: I invest all single family buy and hold homes.
I've had several bankers say they'd loan more to me (on thier commercial side)
I'm curious if anyone has successfully used a spouse to own/qualify for more Fannie backed loans?
She is currently on title/note/mortgage for 2 loans/properties.
One had been a rental for almost 2 years and one will be a rental when we move in under a month.
Future primary residence is in my name only.
She has W2 (schoolteacher) income.
My favorite banker said that since we file taxes jointly, she didn't know if I could have 10 loans and wife could have 10 also.
Banker said she'd dig into it, but I figured there's alot of people fairly versed in banking regulations here so I'd like to help point her in the right direction. Her bank seems very willing to work with me.
Note: Let's keep this discussion to Fannie financing options, please.
I know I can get portfolio loans. I want to avoid them for as long as possible.
Investor · Portland, OR · Member since 2012 · 266 posts · 128 votes
10y
Hi Michael,
Congrats - that's a great problem to have :)
I am not quite to my limit of 10 yet, but I'm getting close enough to start researching the topic. Here's what I can gather:
Technically, yes - you could get another 8 (?) properties in her name. The Fannie limits permit it, and the resource provided by Stephen is the right one.
However, logistically - this will be a nightmare. The few banks that I've spoken with that will even entertain the topic, basically say that you and your wife should have separate finances to make this happen. This doesn't just mean that she would need to quality as an individual, or even filing separate taxes, but also having different bank accounts, expenses, etc.
My wife and I talked about this, but felt that sharing in our finances was more important than getting to mortgage #11 - though I'm a hopeless romantic and obviously the right decision for you may be different.
I hope I'm wrong, and I'll be interested to hear where you land.
Thornton, CO · Member since 2011 · 34 posts · 3 votes
10y
I had actually heard this topic discussed briefly on a podcast the guy that was speaking about it was saying it can work so maybe hit him up here is his website and he has his contact information on there as well. Hope this helps good luck! http://bighauschapman.com/
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
10y
Understand that what secondary guidelines are is not necessarily what ends up on the street to be available from a lender.
It can mean separate income, assets, accounts in qualifying. Don't forget the marital interest in assets and liabilities, you may not be on the note but your spouse will be on the security agreement. A lender has overlays on top of secondary guidelines, they don't want to repurchase a bad loan. You're taking about contingent liabilities, one spouse dies, who goes on the hook to keep and retain the level of assets?
Frankly, since interest is an expense for taxes on investment property I'm not too concerned about trying to shave a point or a point and a half. If financing is that critical, you don't have a good deal. Commercial loans are easier to obtain when you have a good relationship, you can't build that commercial relationship by running to Fannie or Freddie.
As you obtain more in the secondary the LTV drops, you can get 80% all day on a commercial loan with a good relationship. So, factor in the opportunity costs of the higher down payment, then where are you?
I don't even bother with the secondary unless it's a residence or second home.:)
Investor · Miami, FL · Member since 2015 · 329 posts · 124 votes
10y
I agree with Bill Gulley
I'll take a commercial loan over a Fannie any day. The higher cost is worth the no hassle factor. Closing a commercial loan is cake compared to closing a Fannie. The bankers and underwriters are more senior and understand the business you're in and will work with you on a solution, whereas Fannie will kick you to the curb if you don't fit into their tiny box.