Rental Income Requirements for Fannie Mae properties 5-10

[Ben Carmona]

Rental Income Requirements on properties 5-10.

OK..just spoke to Fannie directly to clarify rental income

She said Fannie is definitely saying that if you own properties and want to be able to use income from them to offset the mortgages that you MUST have 2 years of tax returns. If you dont, the full payments will be counted against you for all those units.

We also discussed the subject property rental income. The announcement does not say what is required for rental income. In the past, you could use 75% of the rental income after showing a 1 year lease. The rep there definitely thinks that this is not so for properties 5-10. So the subject property whether purchase or refi could not have rental income included in the calculation.

This last part she was going to confirm when she meets with the credit committee this week. I explained that the guidelines are very vague on these issues. She thinks we should see a new update clarifying this soon. Maybe after discussing more they'll see that this will be very tough for almost any investor.

- side note 1 - She also mentioned that there is not a 2 year landlord history for investors. So if you're doing properties 5-10 and dont have 2 years tax returns for 1-4 and your income/assets fit the new qualifications you should still be ok.

- side note 2 - Fannie does not have a seasoning period for rate/term refinances or purchases. Any lender having these has their own internal overlay