Wednesday, February 11, 2009

Real Estate Investors Get A Break

Fannie Mae announced Friday that they will be changing the rules regarding investment and second home properties. In September '08, Fannie issued a rule which restricted investors to four financed properties when seeking a new Fannie Mae mortgage.

Under new guidelines, effective March 1, 2009, investors will be allowed to have up to 10 financed properties.

From Bloomberg, 2/11

Fannie to Expand Mortgage Rules for Realty Investors
"Fannie Mae, the mortgage-finance company under U.S. government control, will no longer bar real- estate investors from qualifying for its loans if they already own four properties as it seeks to increase housing demand.The company will expand its limit for investor and second- home loans to as many as 10 properties per borrower, according to a Feb. 6 notice to lenders on Washington-based Fannie’s Web site.“Bona-fide, experienced investors bringing significant equity to the table will play a key role in the housing recovery,” Brian Faith, a spokesman for the company, said today in an e-mailed statement."

New guidelines:

25% downpayment
720 min. credit score
No bankruptcies/foreclosures in last 7 years
No delinquencies in last 12 months on any mortgages
6 months liquid reserves for each investment property owned

Let's hope that there are more than a few investors out there who can qualify. And just maybe the rules change will have a positive impact on the national real estate market.

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