HELOC Count Against 10 Loan Limit?
5 Replies
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Michael S. from Bayonne, NJ - New Jersey
posted 20 days agoI've been checking everywhere to find this answer, but can't find it (even after asking a HELOC loan officer), so figured I'd try here. Since I'm getting close to my 10 loan limit, I wanted to see if a future HELOC I get is considered a loan that goes against my 10 loan limit. Any thoughts?
Greg Scott Investor from Metro Detroit, Michigan
replied 20 days agoThe 10 loan limit is for agency financing. Since a HELOC isn't agency financing, I would be very surprised if it counts towards the limit.
On the other hand, a HELOC is great for short-term financing, but I would caution against using it for long-term buy & hold. You are probably better off getting a commercial loan on some or all of your portfolio and freeing up your ability to get more conventional loans.
Edward B. Investor from Midlothian, Virginia
replied 20 days agoMichael S. from Bayonne, NJ - New Jersey
replied 17 days agoThanks for the info. It sounds like the key is to work with the an investor friendly lender and bank so the HELOC isn't counted as 1 of my 10.
Josh Engelhart Lender from Powell, Ohio
replied 17 days ago@Greg Scott is right. It won't count to the 10 loan limit. @Edward B. nailed it on the overlays.
My employer won't finance more than 6 investments properties. Pretty much every bank/ lender will have additional overlays on top of Fannie/ Freddie minimums. I'm seeking the best terms possible on my first loans and then seeking the most flexible lender's to round out my financed piece of my residential portfolio.
Chris Mason (Moderator) - Lender from Oakland, California
replied 17 days agoOriginally posted by @Michael S. :
I've been checking everywhere to find this answer, but can't find it (even after asking a HELOC loan officer), so figured I'd try here. Since I'm getting close to my 10 loan limit, I wanted to see if a future HELOC I get is considered a loan that goes against my 10 loan limit. Any thoughts?
If it's vanilla Fannie with no overlays, the limit isn't actually on the number of loans. It's on the number of financed properties. So one property with 6 mortgages (yes, I have seen that) = 1 financed property.
A HELOC is a mortgage. So if that property is otherwise free and clear it'll count as a financed property moving forward. If there's already a mortgage on it, then it's already counting towards your 10.
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