Does Seller Financing Count Against Fannie's Limit?

[Erik Trefzger]

I've browsed through the forums and wasn't able to find anything on this, but I'm sure other people have this same question. I own 6 properties all financed with conventional 30 year mortgages. I'm considering adding a seller financed property to my portfolio, but I would also like to max out the 10 Fannie Mae backed mortgages as well.

I know that if you buy a property using seller financing it doesn't show up on your credit score, but the rental income will show up on your tax returns. When I apply for a mortgage, the bank looks at the last two tax returns of mine, and they also want to know how many properties and mortgages I have. Even if the private mortgage isn't showing up on my credit score, what would I tell the bank regarding the seller financed property? Here is the issue as I understand it:

1. Fannie Mae / Freddie Mac count the total number of mortgaged properties against your 10 property limit, not just Fannie/Freddie backed loans.

2. I am not at the 10 property limit yet, and would like to have 10 cheap, low interest mortgages on my books before taking on higher interest debt.

3. I don't see how I can add a private mortgage to my portfolio and not have it count against my limit, thus reducing the number of Fannie/Freddie loans I can get by one.

4. Should I just wait until I hit the 10 property limit before pursuing any seller financed deal?

Have any mortgage brokers out there run into this?

Thanks,

Erik