On February 6 Fannie Mae announced
revisions to the Investment Property Guidelines with the hope that this will help in the effort to improve the housing market. Not only do the new guidelines revise the allowance for the number of properties financed, but they also include new reserve requirements for second homes, investment properties and multiple financed properties.
A summary of the changes of Announcement 09-02 are below.
- When more than 4 properties are financed the borrower must have a minimum credit score of 720. For 1 Unit Second Home or Investment Properties the maximum Loan-to-Value (LTV) will be 75%. For 2-4 Unit Investment Properties the maximum LTV will be 70%.
- When the borrower will own one to four financed properties (including the subject property) the reserve requirements are:
~ Two months reserves on the subject property if it is a second home,
~ Six months s reserves on the subject property if it is an investment property, and
~ Two months reserves on each other financed second home or investment property. - When the borrower will own five to ten financed properties (including the subject property) the reserve requirements are:
~ Two months reserves on the subject property if it is a second home
~ Six months reserves on the subject property if it is an investment property, and
~ Six months reserves on each other financed second home or investment property.
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Excellent information.