All Forum Posts by: Danial Qureshi

I just discovered that Freddie Mac recently began allowing property title transfers to an LLC after an amendment to their servicing guidelines, effective on 10/20/2021.

Until now, only Fannie had allowed LLC transfers (since 2017), with Freddie still restricting the practice officially. After this amendment, both Fannie & Freddie servicing guidelines have virtually the same language around LLC transfers where they essentially allow the transfer as long as the loan is 12 months seasoned and the controlling interest in the LLC is the original borrower.

Relevant text is posted below but here is the direct link to the relevant servicing guideline on Freddie's website:

Freddie Mac 8406.4: Additional permitted Transfers of Ownership

8406.4:Additional permitted Transfers of Ownership: 

• The transfer is to a limited liability company (LLC) or limited partnership (LP), provided that:
  • The managing member/general partner of the LLC/LP is the original Borrower. If there are multiple Borrowers, all of them must be members/partners of the LLC/LP, and at least one of them must be a managing member/general partner. If the transfer results in a permitted change of occupancy type to an investment property, such change must not violate the Security Instrument (e.g., the 12-month occupancy requirement for a Primary Residence), and
  • The Servicer notifies the original owner or natural person that the Mortgaged Premises transferred to an LLC/LP must be transferred back to the original owner or natural person prior to any subsequent refinance or modification application to meet Freddie Mac's underwriting requirements.

Hope someone can benefit from this, I hadn't found widespread mention of this on BP so wanted to share.

Attempting to restart this conversation due to new headlines from the FHFA. Link below but the relevant portion for us is that the cap on non-owner occupied loans is being suspended (second homes & investment properties). 

In theory, this should reduce the added spread being charged on conventional investment property loans as originators are no longer subject to investor loan caps with the GSEs. 

Curious if anyone on the lending side is already seeing that in their pricing sheets? Have any investors recently pursued a loan and seen better terms? 

https://www.fhfa.gov/Media/Pub...

Following up here, while pursuing quotes for a builder's risk policy, I was also informed of a policy specifically for "vacant properties undergoing rehab" that I believe Foremost Insurance underwrites. 

It sounded more in line with a residential rehab which isn't a heavy duty rehab involving exterior modifications (additions to the structure etc.). The attractive thing about is was that its paid month-to-month so I can cancel as soon as the rehab is completed. Curious if anyone has experience with those? I still need to get a better sense of coverage differences vs. traditional builder's risk policies.

Thanks a ton, @Steve Babiak for mentioning builder's risk insurance, that wasn't something I was aware of. Follow up question, how much should builder's risk insurance run relative to landlord's insurance based on your experience? 

Thank you both for your responses, Tim & Mike, really appreciate it. 

Hello BP! My wife and I are under contract on our 1st SF investment property in Philadelphia. I was currently in the process of obtaining quotes for an insurance policy for the property. As I'm not living in the property and have plans to rent it post-rehab, I decided a landlord insurance policy would be the best fit. 

Are there any insurance providers anyone has worked with in the area that they would recommend? Ideally, I'm looking to get recommendations for providers in the Philly area but am open to any recommendations. Also, if anyone has general advice on policy limits and how best to structure a policy for an investment property, that would be very helpful as well.

Any guidance would be appreciated!

@Sean Stevens were you able to find insurance for your property? I'm currently in the same boat as you, under contract for my 1st investment property. It is a single family home in Philadelphia. Would you be able to share any recommendations on insurance providers for the area?

Hi All- I'm also a first time poster but have been listening/reading to BP material thus far. Am also looking to invest in MF in this general area over the next year. Just wanted to say thanks for the post & all the information shared here thus far.

Chow- Have you looked at Ridgefield Park? Very short commute to NYC & town has a good amount of MF housing. Taxes not as low as East Rutherford / Carlstadt however.