One of the most often asked questions is the limitations on property ownership.   How many financed properties can a borrower own?   Couple of points to highlight:

 

• Total Financed Properties ONLY applies to 1-4 unit residential financed properties.   Commercial, apartments, 5+ units – all of those do not count in the total # of financed properties
• Total Financed Properties is the AGGREGATE of ALL BORROWERS on the Loan Application.
• A borrower who holds a Limited Partnership interest that has been formed for the purpose of real estate investment/development or a General Partner who has personal liability and whose primary income is derived through the partnership’s long-term investments, must include all properties owned and financed by that partnership.

The rules are very basic:

Occupancy	Fannie Mae	Freddie Mac
Primary Residence	Unlimited	Unlimited
2nd Home	4 (including   primary)*	4 (including   primary)
Investment	4 (including   primary)*	4 (including   primary)

*If > 4 Financed Properties must close on FNMA Retained (LP Not Allowed)

Borrowers with 5-10 Financed Properties – 2^nd Home & Investment Financing

LTV/CLTV Limit:

Transaction Type	# of Units	Max LTV/CLTV	Credit Score
Second Home or   Investment Property
Purchase	1	75 / 75	720
Rate & Term	1	75 / 75	720
Delayed Financing	1	70 / 70	720
Investment   Property
Purchase	2-4	70 / 70	720
Rate & Term	2-4	70 / 70	720
Delayed Financing	2-4	65 / 65	720

• High Balance LTV/CLTV
  • 65% Max LTV / CLTV
  • 740 Credit Score
  • No history of BK / Foreclosure within 7 years
• No 30 day late on mortgage within last 12 months
• Cash Out ONLY allowed as when combined with Delayed Financing – meaning borrower bought property all cash within last 6 months.   If borrower has owned property for > 6 months a cash out transaction will not be allowed when borrower owns > 4 financed properties
• Cash Reserves Required:
  • 1-4 Properties Financed:  2 mos PITI for each financed property
  • 5-10 Properties Financed:  6 mos PITI for each financed property