Maturation rate

2 Replies

Greetings, BPers;
I understand we can use conventional bank loans (for single fam, and <4 unit MF) before they begin to dry up after your fourth or fifth loan.
My questions are these:
How long should one wait between obtaining each of the loans?
Do you state the properties acquired as "income" when you're technically supposed to be living in one/some of the units?

If this is already addressed somewhere on the forum, please let me know. I've not found this discussion.
Thanks in advance.
L

Hi @Lance Ray ,

You can actually get 10 financed properties using Fannie loans, not four. Some lenders have deal-killing overlays that cap you at 4, just don't use those particular lenders.

How long should one wait between obtaining each of the loans? 

There is no wait. Some lenders have overlays regarding "rapid acquisition," others have overlays regarding the rental income not yet appearing on your tax returns if you move too fast. Just don't use those particular lenders. 

You have a "pro" account, so you can simply head over to the marketplace and make a thread saying "hey fellow BP-ers, who is a REI friendly minimal overlays lender in MO?" and get a referral or two.

Do you state the properties acquired as "income" when you're technically supposed to be living in one/some of the units?

Occupancy fraud is the most common type of mortgage fraud. You might get away with it the first time, but the second time when the underwriter goes back and looks at what you did the first time -- boom, your goose is cooked, you go into the fraud list, no more mortgages for you ever, except for hard money.  

  • If you declare that it'll be a primary residence: you have to move in within 2 months, and live there for a year.
  • If you declare that it'll  be an investment property: you cannot move in within one year.
  • After a year of living there or not living there for a year, depending on what you  promised at the closing table, you can do what you wish with it. Hopefully a light bulb just went on over your head, because this opens up a LOT of possibilities. :)

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