Multiple Mortgages to the Same Borrower
To support prudent lending for housing investment, Fannie Mae is changing our current limit of four financed properties per borrower. We will allow five to ten financed properties per borrower, with certain eligibility and underwriting requirements, including a 720 minimum credit score and 70-75% maximum LTV/CLTV/HCLTV (depending on the transaction and property type). The requirements apply to any loan being delivered to Fannie Mae, regardless of whether Fannie Mae is the investor on the borrower’s other mortgages.

You’ll also need to prove liquid reserves equal to 6 months’ PITI per property and there are no seller 2nd’s allowed but, hey, it’s a step in the right direction!

They say this is “in response to changes made by Industry partners” but they are going even more conservative than the recent Freddie/Fannie rules which caps the max LTV on investment properties at 85%.

One of the problems we have run into is that even though the Fannie/Freddie guidelines go to 85%, you can’t find mortgage insurance that goes higher than 80% so I suspect that the Vertice announcement is a reflection of that.

I’ll keep you posted…