Thursday, February 12, 2009

Fannie Mae Allows Investors Have 10 Mortgages

Bloomberg reports Fannie to Expand Mortgage Rules for Realty Investors

Feb. 11 (Bloomberg) -- 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 spur 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 Fannie Mae spokesman, said today in an e-mailed statement.

…In its Feb. 6 notice, Fannie also said it would require some real-estate investors to have more liquid assets to qualify, such as cash in the bank. Some buyers of one-unit properties had only needed two months of mortgage and other payments related to the homes in reserve; that will rise to six months.

Investors with five to 10 properties will need six months of reserves for their other properties, compared with two months for borrowers with fewer homes, according to the notice. Fannie also changed its definition of the payments to include homeowner association dues, cooperative fees and other loans secured by the properties, along with the first mortgages, taxes and insurance.