All Forum Posts by: Ben Carmona

It's actually as follows:

Fannie Mae is expanding the definition of reserves to include all components of the monthly
housing expense (PITIA), including:
ï‚· principal and interest,
ï‚· hazard, flood, and mortgage insurance premiums (as applicable),
ï‚· real estate taxes,
ï‚· ground rent,
ï‚· special assessments,
 any owners’ association dues (excluding any utility charges that apply to the individual
unit),
ï‚· any monthly cooperative corporation fee (less the pro rata share of the master utility charges
for servicing individual units that is attributable to the borrower’s unit), and
ï‚· any subordinate financing payments on mortgages secured by the subject property.

For properties 5-6:
 six months of reserves on the subject property if it is an investment property, and
 six months of reserves on each other financed second home or investment property.

For properties 1-4:
 six months of reserves on the subject property if it is an investment property, and
 two months of reserves on each other financed second home or investment property.

I've been asking around about how well Fannie Mae properties will cash flow.

Whats your thoughts on how good of a deal these actually are? Are they priced pretty well below market value? Will they cash flow with a 90% loan. The rate is higher because it doesnt have PMI.

Easy. Refi investment, possibly cash out. Maybe even fha streamline with great terms.

Pay down balance on primary to 417k. refi.

Let of know if you'd like some help with those.

Dti is determined by the lenders automated underwriting engine. Could be higher or lower depending on strength of borrower. loans submitted mannually should be at 45%.

I interrepet guidelines for rental income to mean a solid 2 years of tax returns will be needed to use as income. As previously mentioned lenders had some flexibility on how they interrepreted fannie. I don't think we'll get that with properties 5-10. If they wanted flexibility they wouldn't have the guidelines upped to 2 years returns rather than 1 year and also specifically pointed out that reduced documentation shown on automated approvals will not be accepted.

I have calls into lenders and fannie about this so should have some feedback soon.

Hey Guys,

There's been some recent updates to the Fannie limit. It's been increased back to 10 financed properties.

https://www.efanniemae.com/sf/guides/ssg/2009annlenltr.jsp

www.eFanniemae.com
Select brokers/correspondents
Select lender announcements
Announcement 09-02
March 1 is the kick off date

Properties 5-10

720 fico
75% purchase 1 unit
70% no cash out refi 1 unit
70% purchase or no cash out refi 2-4 units
6 months reserves for all investment properties owned


* side note - properties 1-4 will require 6 months reserves for subject and 2 months for all other investment properties.


(fannie reserve changes not not mandatory till June 1 but you will likely see lender overlays prior to this date)

If you need assistance anywhere in the US with your loans please let me know.

Just in case you guys havent been following the boards recently.

Fannie is now allowing for 10 financed properties.

http://www.biggerpockets.com/forums/49/topics/28238-fannie-loans-1-again-info-link-?highlight=

https://www.efanniemae.com/sf/guides/ssg/2009annlenltr.jsp

www.eFanniemae.com
Select brokers/correspondants
Select lender announcements
Announcement 09-02
March 1 is the kick off date

Properties 5-10

720 fico
75% purchase 1 unit
70% no cash out refi 1 unit
70% purchase or no cash out refi 2-4 units
6 months reserves for all investment properties owned

* side note - properties 1-4 will require 6 months reserves for subject and 2 months for all other investment properties.

(fannie reserve changes not not mandatory till June 1 but you will likely see lender overlays prior to this date)

If you need assistance anywhere in the US with your loans please let me know

Rate have gone up since the middle of January. Probably just over .5%. Several things could be possible.

1. Your broker told you he was locking the rate but didnt so that he could play the market. Lenders pay brokers based upon the rate they lock you in at. If rates would have got better during underwriting he would have made more commission. If rates got worse he would either tell you to take a higher rate or honestly tell you that he got burned and would pay the difference.

2. He may have forgot to lock this or the lock request faxed to the lender did got go through. Many lenders are automated so the later shouldnt have happened.

3. There are several different risk factors that go into determining an interest rate. If he was adding the pricing adjustments for these risk factors incorrectly he could have quoted you a bad rate.

4. Rates are usually locked for 30-45 days. Sometimes brokers will forget to extend these locks before they expire. In that case, the new loan rate would be subject to worse case. Meaning, were rates better on the original day or current day. Again, rates havent increased by 1.25% though.

Is your loan an investment property loan?

You may want to ask him for a copy of the original lock confirmation that the lender would have sent back to him. If he refuses, contact the owner of the company. You may also want to contact another mortgage company to compare. Going back through the process would be a drag though.

Hi Curt,

Just wanted to point out that your comment wasnt completely true. In Memphis, TN, yes, it does seem to be next to impossible. But in other cities the axe has not falled yet. There are still banks, credit unions, and portfolio lenders doing more than 4 financed properties. Although, I am hearing more and more that the appetite from these sources is shrinking. Many have backed off in the last several months.

I'm actively concentrating on the Memphis market and hope to have some more info there by weeks end.

Toben,

If you'd care to share more info about the city/state you live in and what cities you're investing in I can share my thoughts with you. I'm assuming that you have excellent credit and can go full doc. How many properties TOTAL do you own that are financed? There's probably some additional options other than conventional and hard money.

Adam,

That wouldnt be a rate/term refi. The heloc is on his primary home. So yes, he would be on title but there would be no lien on the properties he purchased using the heloc. He basically paid cash for the properties so they're free/clear.
If he tried to refi them it would be considered cash out which is restricted to 6-12 months based upon conventional guidelines.