Rental Property Investor · Allentown, PA · Member since 2014 · 67 posts · 38 votes
Hi BP!
If an investor already has 3 properties in their personal name and, say, 20 single family properties owned in LLCs all with commercial mortgages... is this investor then eligible to purchase a 4th property with a conforming mortgage in their personal name according to Fannie Mae guidelines? Or does the 10 property limit take effect and the investor would be ineligible?
Here is the most recent information from Fannie Mae I was able to find.
https://www.fanniemae.com/content/guide/selling/b2/2/03.html
Thanks!
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
9y
I believe as long you own more than 25% of the LLC, or have a personal guarantee for the loan, then yes they all count. I can't tag a couple of the lenders on here that will know for sure.
Rental Property Investor · Allentown, PA · Member since 2014 · 67 posts · 38 votes
9y
Thanks Wayne. I see what you're saying. The example Fannie Mae gives in their exceptions list is:
"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."
It seems like if there's a personal guarantee on the LLCs' mortgages then those properties count toward the 10 maximum in personal name. Thoughts?
Thanks