As of last Friday, there is good news for real estate investors with more than 4 financed properties. Fannie Mae is lifting their ban on financing investors with more than 4 financed properties raising the total number to 10. According to Fannie Mae, the rationale for the change is that experienced investors can “play a key role in the housing recovery”. Until now, foreclosure auctions have gone at less than full speed because investors unable to pay cash have been halted by the existing 4-property Fannie Mae limit.
These new guidelines will take effect on March 1st, 2009. There are some particulars to keep in mind however if you are an investor looking to capitalize on this. Investors buying a 5th, 6th, 7th, 8th, 9th or 10th home must meet the following standards:
- 720 credit score
- 25% downpayment for a 1-unit (30% for a 2-4 unit)
- No mortgage delinquencies in the last 12 months
- 6 months of reserves for each investment property
Going forward, expect a more expedient foreclosure liquidation nationwide which should, in turn, provide further support for the housing market. This should help get things flowing again. Also, if you are an investor that has more than 4 financed properties currently, you can now look to refinance and capitalize on the historically low interest rates.
(Image Courtesy of Arizona Mortgage News)