New goverment limits on 30 year fixed rate loans for investors

[Marcus Auerbach]

Fannie/Freddie have announced they are limiting funding of second homes and investment properties to 7% of there overall loan volume, measured in total dollar volume and effective in June. I don't know what the current volume % is, would be interesting to understand how big of a change this really is.

This means rates for investment property loans will go up and access will be more restricted, pushing more investors to commercial type loans.

I have to say I am not surprised. If anything I am surprised that it was possible to buy 10 investment properties with near zero loans goverment sponsored for so long - what a "socialist concept" if you catch my sarcasm.

I wonder if this is just the beginning of a series of steps we are going to see as the goverment starts to respond to the housing inventory crisis. It kind of makes sense - Fennie's and Freddie's mission is to promote primaryhomeownership. With Covid people have bought more secondary homes and of course there is us, RE investors who buy up properties. I believe about 26 or 27% of all single family homes are investor owned, which makes us investors one of the biggest adversaries against homeownership and therefore the most important vehicle for people to grow their net worth, so at least the notion of some people. If you look on YouTube you find plenty of rants how the rich investors are keeping the tenants from homeownership and in a state poverty, which IMO at best is only mostly untrue.

This also means that there will be additional pressure to raise rents. And that it will be more difficult for young investors to get started. Makes me wonder what else is ahead of us?