Rental Property Investor · Miami, FL · Member since 2020 · 25 posts · 9 votes
Something that I been always curious about it !!
I seen many post cast and read a few books but nobody said how many units you can have under de first 10 conventional loans under your name !!
Example if I have 10 conventional loans but each of them are 4plex !! I can have 40 units or 40 doors under my 10 conventional loans before go to the next step that will be comercial loans that are much more expensive or jumbo loans with balloon 🎈!! You got the idea so the question is !!
Can I buy 10 4plex that will be 10 loans under conventional loans on my 10 loans that most banks allow under Fannie Mae rules ?????
Investor · Lakeland, FL · Member since 2017 · 1k+ posts · 1k+ votes
6y
Yes, it is based on loans (not units). If you are married, you can put 10 in your name, and 10 in your wife's name. But know that there are other rules that go along with that... There are increased reserves as your loans go up. Also, you have to have a primary residence in your own name at loan 7. In addition, you are limited to 7 if your median credit score is below 720.
We currently have 17 loans between my wife and I on 41 units. Just know that Fannie Mae looks at "number of financed properties"... so even if you consolidate multiple properties into a commercial loan, say you refi 3 properties on one commercial loan... that is still 3 of your 10 IF you are personally responsible for the note. If you can get away without a personal guarantee and put properties in an LLC, they won't count against your 10 count with Fannie Mae.
All of the information is online at Fannie Mae's website. Check here:
Investor · Lakeland, FL · Member since 2017 · 1k+ posts · 1k+ votes
6y
Yes, it is based on loans (not units). If you are married, you can put 10 in your name, and 10 in your wife's name. But know that there are other rules that go along with that... There are increased reserves as your loans go up. Also, you have to have a primary residence in your own name at loan 7. In addition, you are limited to 7 if your median credit score is below 720.
We currently have 17 loans between my wife and I on 41 units. Just know that Fannie Mae looks at "number of financed properties"... so even if you consolidate multiple properties into a commercial loan, say you refi 3 properties on one commercial loan... that is still 3 of your 10 IF you are personally responsible for the note. If you can get away without a personal guarantee and put properties in an LLC, they won't count against your 10 count with Fannie Mae.
All of the information is online at Fannie Mae's website. Check here:
Lender · Schaumburg, IL · Member since 2015 · 833 posts · 774 votes
6y
@Jorge Lopez yes, you could finance 10 separate 4-units with Conventional financing. Assuming that after you bought the 10th property, you still have all 10 mortgages, you cannot buy another investment property with Conventional financing (primary residences aren't restricted, you can buy a primary even with 10 financed properties).
Once you hit the 10, you may have an opportunity to restructure your debt. If you have more equity in some of your properties, you could do some cash out refi's and re-leverage, and possibly pay off 1 or more properties, freeing up another Conventional slot for you. Because you can have up to 10 financed properties. Once one is paid off, it's not financed anymore. You could have 50 properties, what counts towards the 10 cap are the ones with mortgages in your name.
Rental Property Investor · Miami, FL · Member since 2020 · 25 posts · 9 votes
6y
@Zack Karp thank you so much man I did not knew that after the 10 loans you still can buy a primary residence !! Good tip thank you man ! I have just 1 4plex and my primary house but is been more than a year I can buy another primary residence and rent mine as a rental !! But want to hit those 10 loans before 2021 finish !! I have some funds but Pensacola market is not expensive that’s why I’m looking for 4plex here to max the 4 unit at a time under conventional!! 🤗
Rental Property Investor · Miami, FL · Member since 2020 · 25 posts · 9 votes
6y
@Randall Alan thank you for the link and talk about the 720 score after 7 loans did not knew ! I’m close to the 720 hopefully get there when is the time of go about the number 7 🤗
Curious if you know something I don't... (and hopeful that you do)!
Listed below are the Fannie Mae Guidelines on maximum number of loans. If you already own a primary residence, it appears to count towards the 10 count loan limit for investment properties. If your personal residence was not financed, you could get 10 investment properties... but I don't see how this chart lets you have 10 investment properties if your personal house is financed. It's a bit confusing... but curious how you are interpreting it, and if you have actually pushed this scenario through with Fannie Mae? We are maxed at 10, but would be at 9 if personal residence didn't count.
Randy
Limits on the Number of Financed Properties
The following table describes the limits that apply to the number of financed properties a borrower may have.
Subject Property Occupancy
Transaction
Maximum Number of Financed Properties
Principal residence
Transactions other than HomeReady loans
No limit
Principal residence
HomeReady loans
DU and manually underwritten - 2
Second homeInvestment property
All
DU - 10, Manually underwritten - 6
The number of financed properties calculation includes:
the number of one- to four-unit residential properties where the borrower is personally obligated on the mortgage(s), even if the monthly housing expense is excluded from the borrower's DTI in accordance with B3-6-05, Monthly Debt Obligations
the total number of properties financed, not to the number of mortgages on the property or the number of mortgages sold to Fannie Mae (a multiple unit property counts as one property, such as a two-unit);
the borrower’s principal residence if it is financed; and
the cumulative total for all borrowers (though jointly financed properties are only counted once). For HomeReady loans, financed properties owned by a non-occupant co-borrower that are owned separately from the borrower are excluded from the number of financed properties calculation.
Lender · Schaumburg, IL · Member since 2015 · 833 posts · 774 votes
6y
@Randall Alan it depends on the subject property (the one you are financing).
Yes, a primary residence DOES count towards the 10 financed properties, if you already have one. So for example, if you had a financed primary, and 9 financed investment properties, then you cannot buy another investment property with Conventional financing, since you already have 10 total financed properties.
However, in that same example, you COULD buy a new primary residence, because a primary residence transaction has no limit on the number of financed properties.