Hitting your 10 financed properties limit with fannie Mae
Often times we'll hear about how you can use financing from Fannie Mae up to 10 financed properties.
This is typically true however proper planning can allow a borrower to obtain many more financed properties.
The context we're talking about pertains to 1-4 unit residential properties so 5+ multi-family, commercial, or industrial will not count as the definition for "financed property."
Some strategies to obtain more than 10 financed properties would be to:
- transfer, buy, or own your properties in entities such as LP, LLC's, or partnerships where your ownership is less than 25% since any property with financing only counts against this 10 count if your ownership in these partnership style entities only counts when your ownership is at 25% or greater
- Use a spouse whom you trust who can keep or own 10 financed properties in their name and 10 in your own name
- Own properties in a corporation where by financing upon that property is not tied to your personal name as these will not count towards your financed properties count.
- Use commercial and or portfolio financing from local banks once you hit 10+ financed properties so you can acquire additional financed properties and allow you to continue to grow your portfolio
- Liability optimization can allow you to shift two loans on two separate properties into one loan to go from two financed properties back to one financed property there by allowing you to acquire more financed properties. The borrower will need sufficient value in a property in order to do this type of cash out refinance consolidation loan. This can be planned when comparing acquisition cost to the after improved value of assets prior to buying them.