Fannie Mae recently raised the property limit that a person can have under their name back up to 10 properties. This is great news for qualified investors, now instead of a limit of 4 they can purchase 10 cash flowing properties.
To qualify for properties 5 through 10 using conventional financing a buyer:
- Must have amiddle credit score of at least 720
- Must be able to fully document their income with their tax returns
- Must be able to put down 25% of the sales price.
- Must have income strong enough to result in a debt-to-income ratio of 45% or less.
- And the kicker- the buyer must also show 6 months of liquid reserves for principal, interest, taxes and insurance on not only the subject property but on all their properties -including their primary residence.
Assets from IRAs and 401(k)s may be used but could be devalued depending on the type of asset. One example would be stocks which would be reduced to 50% of the face value.
What do you think this will do for the market?
To your success,
Oliver Graf
Real Estate Expert
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