Finally - Good News from Fannie Mae!
Posted February 12, 2009 1:18 p.m. EST
Updated February 12, 2009 10:23 p.m. EST
In recent history, most news regarding Fannie Mae has generally been less than stellar. I have an announcement from Fannie however, that will put smiles on many potential market participants faces.
Great news for borrowers, investors and homeowners alike. Coming directly from Fannie Mae’s Selling Guide, Fannie Mae has recently reversed a change in the total number of mortgaged properties that an individual is allowed to have under their personal ownership umbrella. The old number was 10 - that figure was revised downwards to four last year during what I call the “kneejerk underwriting response contraction period”. Thankfully, cooler heads prevailed, and as of last Friday that number has returned to a range of between five and ten – based on certain qualification aspects specific to the Fannie Mae Selling Guide Guidelines. Why is that good news you ask? Well, obviously Fannie Mae is fully aware that the crippled housing market engine needs as much oil as possible in order to travel the path back to normalcy. Think of this increase as large barrels of oil being sprayed upon the squeaky wheels of housing.
Of course, there are caveats which come along with such an increase, and here are a couple of requirements to be wary of when in the market for a second home or investment property.
1. The borrower cannot have any history of bankruptcy or foreclosure in the past seven years
2. The borrower cannot have any delinquencies (30 days or greater) within the past 12 months on any mortgage loans
3. Rental Income on the investment subject property must be fully documented according to the selling guide. Rental income from other properties owned by the borrower must be supported by two years’ Federal Income Tax Returns.
This change should open the doors (no pun intended) to not just a greater number of potential bona fide, Credit worthy borrowers -but to a larger number of real estate purchase transactions which will help to act as a catalyst in getting the housing train back up to speed.
Stay tuned – next up – Stimulus package! How will it impact the Triangle Housing Market and those living in NC?
Jeremy M. Salemson
Corporate Investors Mortgage Group, Inc.