How Many Mortgages...?

Question

All-

I have read where you can only have 4 or 5 mortgages out with banks who sell their loans to Freddie/Fannie. However, I am looking to both originate conventional lending as well as refinance private notes at smaller, local credit unions that hold these notes in their portfolio, and therefore are not subject to the "limit" or 4/5 mortgages.

Is this still the case in 2014? Does anyone know of the typical lending requirements? Does anyone have a lender that they would recommend? I would love to build a relationship off of a referral and do all of my business moving forward with one dependable lender.

Thanks for all the thoughts, advice, and referrals to lenders at these smaller banks!

Clay Manship · Answer

Thanks @Brian Levredge

This is exactly what I am trying to do. I am a buy and hold investor who is simply looking to purchase, buy, rehab, and rent--then refi in order to pull back out my initial capital.

Would you mind sharing the name of your lender with me? I would be happy to give a referral. Feel free to message me or e-mail me: manshipc@xavier.edu. Thanks so much!

Brian Levredge · Answer

If you have the track record and resources, you should be able to find a portfolio lender willing to refinance you assuming you fall within their in house guidelines.  The key is see what type of deals they are looking to finance and then (assuming they still fall within your investing parameters) going out and finding them if you don't presently own anything that fits what they are looking for.  For example, I have a local lender that will do cash out refi's on NOO houses.  I'm able to buy several at a time, rehab, rent, and then refi, pulling my initial capital investment back out because the LTV is pretty conservative.  However that same lender is a little more reluctant to finance some new development flips I'm doing because they view it as purely speculative, which it is.

Brie Schmidt · Answer

Our lender told us yesterday he can do a 5th (up to 7) with 6 months reserves on all properties, a min 720 credit score and 30% DP

Aly W. · Answer

I have 6 Helocs/mortgages, and can not get any more F/F loans from traditional banks for investment condos in FL. I did, however, find a great, small local bank in Ft. Lauderdale, Regent Bank, that will do a cash out refi on the condos. Terms and rates aren't nearly as good as Helocs, but at least it's do-able.

Ed Wood · Answer

Fannie/Freddie allow up to 10, however, banks and lenders have what's called "overlays" which tighten up native fannie/freddie guidelines.

There are some lenders who will follow the native fannie/freddie guidelines that allow up to 10 properties owned and financed this does not include 5+ multi family or commercial property.  From 1 to 4 propeties owned and financed you can do purchase, rate and term and cash out refinaces when you reach 5-10 you can only do purchase and rate and term so no cash out.  This means plan carefully.  My suggestion is fill up your 9 slots with 4 unit properties and 1 primary.

Aaron Montague · Answer

10 seems to be the absolute max.  4 mortgages from Freddie/Fannie institutions.  I've never heard of a place willing to lend on a 5th one headed for F/F.  But would be REALLY interested if anyone had one available!

The lending requirements above 4 don't seem to change.  Most are still looking for 6 months of reserves on ALL mortgages.  Your credit score dictates your ability to borrow, and the last 3 mortgages may require a "very good" or better score.  I can't validate that last statement, but I have seen that floating around BP.