If you haven’t heard the news…Up to 10 properties are now allowed for the “bona fide” investor. Better late than never. The tax credit isn’t going to do anything for the investor and it’s the investors that will help buy up the inventory. Fannie Mae even admitted that these experienced investors will play a key role in the housing recovery. They want to serve these individuals who have a history of owning rental property.
The following guidelines must be met:
- 25% down payment
- No bankruptcies or foreclosures in the last 7 years
- No Mortgage lates within the last 12 months
- 2 years tax returns showing rental income from ALL rental properties
- Minimum credit score of 720
- 6 months of PITI reserves on EACH of the financed properties
All investors are also required to sign a form granting lenders permission to verify the tax returns that have been supplied, against the official IRS filed version.
Let’s remember that the banks are holding record numbers of foreclosed properties on their books….while the most likely buyers of these homes, the investors, have been unable to obtain financing. Investors want to buy and Fannie Mae, now our Government, made it impossible. The change is meant to extend banks and lenders a “lifeline,” bringing back experienced investors.
When the 4-property restriction went into effect, it was made on the Friday before Fannie Mae’s nationalization. This date has come to be known as “The Day Before the Refi Boom Started.” On Monday, rates dropped and homeowners with 5+ properties found themselves ineligible. They couldn’t refinance their primary or investment/vacation homes. TODAY, that is NO longer the case for the high-credit, “bona fide” real estate investor….let the games begin!
This change is GREAT for everyone, the banks, the investor, and the real estate agents.