Fannie Mae Increases Lending Caps
March 28, 2009, Writen by: Michael C. Zari
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To help support the needed financial recovery, Fannie Mae has announced that they are changing their recent investor cap on the total number of mortgages under the same borrower. In the later part of 2008, Fannie Mae reduced the total number of mortgages that an investor can have from 10 down to 4! This resulted in investors scrambling for higher-rate in-house programs and even higher rate private funds for investing.
Now with the issuance of Announcement 09-02 by Fannie Mae, the cap has been temporarily lifted back up to 10 properties. While still sorting to the details, for properties #5 to 10, it looks like 75% LTV with a minimum of 720 credit score and above. The requirements apply to any investment property or second home loan being delivered to Fannie Mae, regardless of whether Fannie Mae is the investor on the borrower’s other mortgages.
You can read more details on this by clicking on the below link: http://www.gozoneonline.com/FannieMae0902.pdf
Remember that most banks, even with this rule, may still limit the total number of mortgages that you have with their institution. However with this said, it greatly opens the doors back up for investors in the GO Zone trying to take advantage of the benefits before the end of this year.
Given this temporary reprieve from Fannie Mae, the timing of the remaining GO Zone benefits, and based on previous Fannie Mae changes over the past 9 months, I suggest that any serious investor who has been wanting to invest in the GO Zone do so now before the cap rules change back and while you can still find high-quality and affordable opportunities.
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