I have found a Mortgage Banker and a local Mortgage Lender who are processing investor loans who own 4 or more mortgages provided you meet the new Fannie guidelines.
As far as calculating rental income they are doing it as they always have and you don’t have to show each property on 2 years of tax returns like some have suggested. You only need to provide your last 2 years tax returns I would assume to show you have experience investing for at least that long.
The problem with that is that they will eventually get stuck with those loans and wont be able to sell off to Fannie.
Lenders and Mortgage Bankers can interpret the guidelines however they want. Matter of fact, they can completely ignore every guideline if they choose to. Those loans will not be sellable.
I’ve personanly spoken to underwriters within Fannie who clearly stated the guidelines for properties 5-10 were specifically made to be tougher.
Landmarx, if you search long enough you can always find someone to manipulate (circumvent) guidelines. That’s part of the problem the mortgage industry is finally starting to clear up.
There are lenders out there doing more than 4 financed investor properties. Not how you need them to do it but how it should actually be done. That should tell you something; if 95% underwrite with 1 method and 5 to another, which do you think may be right.
As we both have seen through the fannie guidelines, properties 5-10 must be supported by 2 years of tax returns. Income can not be calculated as normal. It actually states this.
Good luck. Keep in mind that if they’re telling you this that they may just do anything else required to get your loan closed. You’re on the hook as well since your signature is the loan application.
It took me all of 2 hours to find 2 contacts who are doing these loans. One is a very large mortgage lender in Houston who has worked with the Real Estate Investors Club of Houston for years. I think if they are doing these loans that Desktop Underwriter is correctly counting rental income.
Also, who cares what 1 contact at FNMA says. You get 5 different opinions on issues like this all the time. It’s who is processing these loans that you need to talk to. I have contacted several brokers and bankers. They are doing the rental income on 5-10 off of 2 years tax returns. They are not requiring all 5-10 to be on both returns, only on 1, it show’s the investor has more than 1 years experience. That also makes sense since FNMA lets you use the subject property with no seasoning as income. Let’s use common sense.
I think those who keep saying it can’t be done have another program they would like you to use. If you need a conventional loan on 5-10 I have some contacts you may be interested in.
Anyone else have any contacts for the FNMA 5-10 investor program?
Good luck investors.
Let me make it more clear on how everyone I talk to is counting rental income:
75% of Rental Income on properties 1-10 is used as income, but one must be on 2 years of tax returns if you own 4 already. The property you are financing or refinancing up to a total of 10 can be used with a lease agreement and/or appraisal. In this way the FNMA guideline is being met.
Property 5-10 is being verified with 2 years tax returns.
Like I said I think the Desktop Underwriter should already be taking care of this, shouldn’t it?
I am only telling you what everyone I talk to is telling me except IL. I can verify them for you.
No this is absolutely incorrect on 2 factors.
This is for properties 1-4. Rental income is calculated in either of 2 manors. Subject property rental income - use 75% of lease. For other rental properties owned over 12 months the rental income is calculated using the schedule E from the last filed tax return. Other property owned less than 12 months can use 75% of rental income. The desktop underwriter clearly will state out in the printed approval exactly what is required.
For properties 5-10 the guidelines clearly state that you cannot use desktop underwriting approval guidelines to calculate income. You have to use the last 2 years of tax returns for this. If the property does not have an income showing up for the last 2 years filed then you cant use any of the income.
This is not was reported to me from several sources including a large well known mortgage company in Houston who works with investors, so if anyone needs any information email me. Talk to the people who are actually doing these loans to get the facts on rental income.
good luck investors