Carlsbad, California — According to Fannie Mae and effective March 1, 2009 real estate investors can once again own and finance up to 10 individual properties–instead of the current four.
San Diego real estate investors, though, will have to meet new minimum requirements:
Those buying a 5th, 6th, 7th, 8th, 9th or 10th home must meet the following standards set forth by Fannie Mae:
- 720 credit score
- 25% down payment 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
In other words, Fannie Mae is re-opening the lending spigot for real estate investors having good credit, ample reserves and a sizeable down payment . Logically, Fannie Mae believes that this change will allow investors to “play a key role in the housing recovery.” That is because under current guidelines, investors with four or more properties–and who are going to foreclosure auctions–were unable to obtain mortgage funds under Fannie Mae guidelines. Instead, they were forced to use “hard money” loans–or cash reserves to complete their purchases.
This change should help expedite the San Diego foreclosure liquidation process–and provide more support for the San Diego housing market.
And finally, homeowners with more than four properties will be able to participate in the ongoing conforming mortgage Refi boom. Until now, they, too, have been stymied by the four-property restriction.
For additional reading:
Let’s Resurrect Assumable Loans
Want to Modify Your San Diego Home Loan?
San Diego Real Estate News Upbeat–Sorta
San Diego Foreclosures Take a Holiday