Finance Investment Property – Good News For Real Estate Investors From Fannie Mae

Finally some good news is coming from Fannie Mae – real estate investors are back in business and should be able to find it easier to finance investment property after March 1, 2009. Since the mortgage crisis hit in 2007 and through most of 2008, Fannie Mae and Freddie Mac had limited the number of GSE (government sponsored enterprises) backed mortgages to three for any individual. This has drastically slowed down the amount of mortgages that a real estate investor could get to purchase homes on the market.
With this limitation real estate investors have been forced to pay cash for homes, or use a line of credit – neither option being attractive as no one wants to part with cash in today’s economy nor do they want to get stuck with a home on their credit line.

Finance Investment Property – Real Estate Investors Can Have Up To 10 Properties
Fannie Mae and Freddie Mac understand that real estate investors play a vital role in getting the U.S. housing market moving again. As a demonstration of this, Fannie Mae has opened the door to investors to finance investment property up to 10 mortgages provided the investor meets certain qualifying requirements.

Real Estate Investor Requirements To Finance Investment Property
Some of the biggest requirements is the investor must have a credit score greater than 720, cash liquid reserves of 6 months or more, and in most cases will have to put at least 30% down.

Investor cannot have had any prior bankruptcy or foreclosure with in the past 7 years.

Late mortgage payments within the past 12 months are not allowed. Late payments are any payment over 30 days late.

Rental income from other rental properties owned by the real estate investor must be proven over a 2 year period of time to qualify the income from these investment properties.

The lender must request and receive a copy of the real estate investor’s tax returns from the IRS prior to the real estate closing to ensure the tax returns provided by the investor are valid and accurate.

Investment properties able to be financed through Fannie Mae and Freddie Mac are 1-4 unit residential properties.
Hopefully with these changes to allow an individual real estate investor to finance up to 10 investment properties there will be some movement in some of the worst hit residential markets in the country such as Arizona, California, Nevada, Texas, and Florida.