Mortgage - FNMA / FREDDIE MTG Points on Investment Properties

[Kevin Urban]

Hello,

Recent loan estimates from my mortgage broker are now showing additional points from Fannie Mae/Freddie Mac for investment properties. I'm told it's a new policy of FNMA/FRE for investment properties with less than 30% down payment. Curious if others are seeing this? In my case it was 1.75% on a $200k loan, so an additional $3500 at closing. Not necessarily a deal breaker, but just another hurdle in a rising rate environment. Any feedback would be appreciated. Thanks!

[Nathan Grabau]

I have a conventional loan on my primary residence, and have refi'ed it a number of times with ease through the same broker. That being said when I went to purchase a MF property out of state, the conventional loan process became a nightmare. This was late last summer, and I was going to be in the mid 4's, with 25% down and 6 months of payments for all of my debt in reserves. 

My relator in Iowa connected me with a private bank's mortgage department and the process was so much easier and now I have closed on 3 properties with them. I ended up getting a 3.75% rate, with 20% down, on a 7 year balloon that amortizes over 25 years. While the 25 years increased the monthly payment a little bit the lower rate and down payment more than made up for it. Being a private bank, there were also less rules regarding caps on closing credits too. On one property for example that I bought for $150,000, I only ended up putting 22k down with seller credits, that weren't even property deficiency related. If anyone is curious about who they are, it is TS Bank in Ames, IA. My assumption though is that they cannot lend out of Iowa, but there are likely similar banks to this one in the area you are investing! Good luck!