Austin, TX · Member since 2017 · 16 posts · 5 votes
Hi Bigger pockets community,
I got a question regarding to the limit of "10 financed properties" for conventional mortgage. I wonder is private lending mortgage counted within the 10 properties? My understanding is it's counted if it's under my name, but not counted if it's under a LLC. Anyone has the experience to confirm my thinking?
Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
5y
Not all lenders have the 10 limit. What do you show on your IRS taxes and what shows on your mortgage credit is what matters. Doesn't matter about the vesting or LLC vs your name.
Fannie Mae says "10 financed properties" so a loan under your name to a private individual would be considered a financed property. It doesn't matter if it's conventional or private. Like @Caroline Gerardo said, if it shows up on your 1040 or credit report, you'll have to explain it.
Fort Lauderdale, FL · Member since 2019 · 94 posts · 16 votes
5y
I asked the same question a while ago here also searched in BP, several people answered that their lenders count number of loans on your credit report (so only if the loan acquired by LLC is NOT reported to your credit report, it most likely won't be counted as 10 financed properties even if it shows up on your 1040.).
Fannie Mae guide on what counts towards 10 financed properties:
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 are not included in the property count and the result is only two financed properties.
This example says "borrower is not personally obligated on the mortgages". So the property and loan has to be under LLC and the borrower is not personally obligated on the mortgage.
I am wondering if "personally guarantee" means reporting to credit bureau?