Posted on: 31st Dec, 2008 05:55 pm
we have several 3&4-family investment properties, all owned 5+ yrs or more, some with interest rates over 6%, current ltvs around 70%. most are break-even or better, but we want to refi the higher-rate loans to lower the interest rates.
with the new fnma 4 prop limit, we are feeling very stuck, even with no late pmts, credit scores > 730.
1) do the "loan modifications" now going on for troubled loans bypass the fnma issues? can/will lenders do the same for people who are not in arrears? we're not looking for a free ride - we would pay "points" to get lower pmts. how should we approach the lenders?
2)will any of the national lenders do porfolio loans at similar aprs?
3)there is an exception to the # of owned properties rule, which excludes properties owned by a corporation, even if it is controlled by an individual. a lawyer suggested placing our houses in llcs for asset protection. if we did this for some of the houses, it would get us to the 4 house "owned" limit. however, would the mortgages on the llc houses also have to be out of our names as well to claim the non-owned status?
with the new fnma 4 prop limit, we are feeling very stuck, even with no late pmts, credit scores > 730.
1) do the "loan modifications" now going on for troubled loans bypass the fnma issues? can/will lenders do the same for people who are not in arrears? we're not looking for a free ride - we would pay "points" to get lower pmts. how should we approach the lenders?
2)will any of the national lenders do porfolio loans at similar aprs?
3)there is an exception to the # of owned properties rule, which excludes properties owned by a corporation, even if it is controlled by an individual. a lawyer suggested placing our houses in llcs for asset protection. if we did this for some of the houses, it would get us to the 4 house "owned" limit. however, would the mortgages on the llc houses also have to be out of our names as well to claim the non-owned status?
Hi pfb,
As far as I know, yes, it's true that Fannie Mae has come up with a 4 property limit. I think the lawyer has given you the correct information that you can place the properties in a LLC and attain the 4 property limit. However, as the property already has a mortgage, there are chances that your mortgage will become due immediately as you change the ownership of the property to a LLC. You should check your mortgage docs in order to know about the clause.
As far as the loan modification is concerned, you should check out with the lender. I don't think the loans will bypass the guidelines issues by Fannie Mae. As far as portfolio loans are concerned, the rates are more or less same when compared to conventional or FHA loans. It is only that the terms and conditions of portfolio loans may vary from Fannie Mae/Freddie Mac loans.
You can contact the lenders of your area and check if they are ready to give you a portfolio loan. This community has a number of lenders. You can speak to them and seek a no-obligation free mortgage consultation". They will be able to tell you what kind of rates and terms you can expect and will also help you to know the market rates and terms.
Thanks,
Jerry
As far as I know, yes, it's true that Fannie Mae has come up with a 4 property limit. I think the lawyer has given you the correct information that you can place the properties in a LLC and attain the 4 property limit. However, as the property already has a mortgage, there are chances that your mortgage will become due immediately as you change the ownership of the property to a LLC. You should check your mortgage docs in order to know about the clause.
As far as the loan modification is concerned, you should check out with the lender. I don't think the loans will bypass the guidelines issues by Fannie Mae. As far as portfolio loans are concerned, the rates are more or less same when compared to conventional or FHA loans. It is only that the terms and conditions of portfolio loans may vary from Fannie Mae/Freddie Mac loans.
You can contact the lenders of your area and check if they are ready to give you a portfolio loan. This community has a number of lenders. You can speak to them and seek a no-obligation free mortgage consultation". They will be able to tell you what kind of rates and terms you can expect and will also help you to know the market rates and terms.
Thanks,
Jerry
I am in the same situation and have been trying to come up with a way to refi some of my adjustable mortgage rates to a fixed lower rate. I have great credit, lots of equity and no late payments. So far, I have found noone who will refinance anything and I thought about placing my homes in an LLC also, so that I could be under the new 4 loan cutoff. I am looking into that
FNMA announced Feb 6, 2009, their limit to ten properties financed again and encouraged lenders to start offering them ASAP. Most lenders have probabaly not started yet.
The new requirements are heavy on reserves for liquid assets, figure 6 months reserves for all mortgage payments (except the house you occupy).
Multiply 6 times all your PITI payments to get liquid reserves you will need to verify.
Also, credit scores must be 720 or higher.
Purchase and rate and term only (no cash out)
Single family investor up to 70%LTV for refinance and 75% LTV for purchase
Two to four family maximum 70% LTV.
With all the add ons to rates, the rate will probabaly not be as low as your are counting on.
The new requirements are heavy on reserves for liquid assets, figure 6 months reserves for all mortgage payments (except the house you occupy).
Multiply 6 times all your PITI payments to get liquid reserves you will need to verify.
Also, credit scores must be 720 or higher.
Purchase and rate and term only (no cash out)
Single family investor up to 70%LTV for refinance and 75% LTV for purchase
Two to four family maximum 70% LTV.
With all the add ons to rates, the rate will probabaly not be as low as your are counting on.
