Fannie Mae Conventional Loans

7 Replies

I need help overcoming the limitations of conventional loans.  I have seven Fannie Mae mortgages, so my ability to fund tree and four plexes is limited.  Portfolio lenders appear to be non-interested or provide horrible conditions.  Private money is expensive and can kill deals.  Any way to access conventional lending without limitations?.  Thanks. Francisco

Originally posted by @Francisco Alzuru :

 Thanks for your response. That is exactly the problem. Even if I do three 4 Plexes, all I can do is add 12 units. I need to add many more.....

What a lot of people in your position do, to stretch/maximize the use of gov't subsidized money, is 1031 some of their early "bad" property purchases up... that condo with the HOA dues going up faster than rent, the "meh" SFR you have which you wouldn't have purchased under your 2018 deal underwriting criteria, the duplex in a neighborhood that always attracts bad tenants that you're sick of, etc.

But, yup, eventually you either move to portfolio loans, commercial loans, or go up into the commercial real estate space entirely. 

@Francisco Alzuru   You can free up your Fannie Mae allocation by refinancing into a portfolio loan at a higher interest rate, but why would you do that?  If your Fannie allocation if full, you have little choice but to go with commercial asset based loans.  Yes the rate is higher, but you don't have any debt to income requirements and your personal income does't factor into the underwriting.  And you can finance unlimited number of properties.  I work with many guys that have 50-100 houses.  The Fannie boat sailed for them long ago.  

@Francisco Alzuru I know of one portfolio program that came out this year that isn't too much more expensive than conventional, allow up to 15 properties, lower credit score, lower reserves, and lower down payment requirements than conventional. Of course, the lower your down payment or credit score, the higher the rate will be. Then there are DSCR programs that qualify you based on the cash flow of the property that have no limit on how many financed properties you can have. Personal DTI is not an issue with this and reserve requirements are also not as high as conventional loans. There are options out there with fixed long term financing - I would suggest looking for a broker wherever you're buying properties. They will have access to more of these niche programs than a bank will.