At last, Freddie Mac is offering a program that allows investors to finance more than 4 properties. I guess good things come to those who wait! That’s what the Heinz Ketchup folks taught me. Freddie Mac and Fannie Mae often inevitably mirror each other to some degree. Finally Freddie Mac has stepped up with their own multiple financed properties program.
Prior to Freddie Mac’s 6 financed properties program, investors were limited to financing 4 properties. It was that or utilize Fannie Mae to finance up to 10 properties. While Fannie Mae works for many, some borrowers are only approved under Freddie Mac’s guidelines. The 2 have varying regulations and underwriting requirements.
Conventional Home Loan Allows 6 Financed Properties
Freddie Mac upgraded their guidelines to allow a borrower to finance up to 6 properties. Before the change Freddie allowed 4 financed properties. Now, they have ratcheted that total up to 6. This is a welcome change to mortgage lenders and Real Estate investors alike.
Fannie Mae vs. Freddie Mac Multiple Financed Properties
Now that Freddie is in the multiple financed properties fight, when and why would they win? The clearest knockout is with cash out refinances. Fannie Mae does not allow cash out refinances for consumers with more than 4 financed properties. That is, unless subject is their primary or they qualify for “delayed financing.” Freddie Mac however does allow cash out refinances for borrowers owning up to 6 financed properties.
Fannie and Freddie are not both resources for pricing. Prior to the change, the only rate choice was Fannie. Now we can compare. Mind you that pricing on Fannie Mae and Freddie Mac products are rarely anything more than .125% different if they are different at all.
By Jeremy House