Financing in 95121>Question Details

 Bs, Real Estate Pro in San Jose, CA

How many mortgages for rental properties in CA now?

Asked by Bs, San Jose, CA Tue Oct 4, 2011

I heard that: now, you can only apply maximum 4 loans for 4 rental properties in CA. Is that true? If so, is there any maximum amount limitation for each loan? Thank you!

0 votes Share Flag Financing in 95121

Help the community by answering this question:


Fannie Mae & Freddie Mac, which are the most commonly used loan programs, limit the maximum amount of financed properties to 4 (including the one you are financing) when you are financing a 2nd home or investment property. Fannie Mae has a special program where you have up to 10 financed properties in that situation - has higher FICO score & reserve requirements. There are also non-conforming/portfolio loan programs where you can finance up to 10 properties, and there are a small amount of lenders who still offer unlimited amount of financed homes when you are financing a 2nd homes or investment property. As far as maximum dollar amount, there isn't an industry standard but some lenders will limit their exposure to 4 loans and/or $2,000,000 in total loan amount, but that limit will vary from lender to lender for those who have them.
0 votes Thank Flag Link Wed Oct 5, 2011
Hi Bs

No it is not true, it all comes down to the size of the loans you are pursuing.
Government loans have limits on number of properties and loan size.

There are several lenders who will finance any amount and number of properties.

But lenders will want to see if you are Cash flow positive, by doing rental surveys in the
neighborhood you are buying and what is your cost to Own and Maintain the property.

Prudent to buy several Condos and Town Homes that have been foreclosed in many fine
areas sometimes ranging from $150K to $250K, and renting them out.

Best regards
0 votes Thank Flag Link Wed Oct 12, 2011

For a primary residential purchase it doesn't matter. For an investment property purchase on loan amounts to $417,000 up to 10 financed properties. On larger loan amounts we don't have any limits, could be 200 financed properties.

Happy funding, Rudi
Web Reference:
0 votes Thank Flag Link Wed Oct 5, 2011
Hi Bs,

I work for a direct lending mortgage bank that does not add any of these additional guidelines. We can finance your purchase since we will finance up to 10 properties per person, and sometimes more than 10 properties if the borrower is "strong." This is somewhat rare in today's lending environment. We can do this because we not only process, underwrite and fund our loans in-house; we also service our loans as well.

The common problem that many investors like yourself run into when trying to build their investment property portfolio, is that most of the lending institutions add their own additional set of lending qualification criteria known as "guidelines" on top of what Fannie Mae, Freddie Mac & Ginnie Mae state their guidelines are for purchasing loans. Most lenders will cap you at four financed properties, even though Fannie Mae guidelines state that an investor can finance up to 10 properties. Since we underwrite directly to Fannie Mae, Freddie Mac & Ginnie Mae guidelines, we can do many things that other banks won't.

Now, Fannie Mae guidelines state that once you own five or more financed properties, they require 25% down. The loan amounts will vary depending upon the location of the property and the number of units, up to four, starting on the low end loan amount limit of $417,000.

Please feel free to contact me if you have any further questions, I'd be glad to help.

All the best,

Roswell Moore, CMPS
Certified Mortgage Planner
480-422-5095 direct

We are a Direct Lender, Mortgage Bank where we originate, process, underwrite, fund, and service our loans, in-house, FHA (starting at a 580 score), FHA Streamline loans (no minimum credit score, no appraisal required) FHA 203k rehab loans, HomePath, Investor Friendly (10 financed properties; more on a case-by-case basis), VA, USDA, Jumbo, and Conventional.
Web Reference:
0 votes Thank Flag Link Wed Oct 5, 2011

Picking up from where Mr. Milne left off:

Fannie Mae loans have different limits ranging from $417,000 to $625,000, depending on which county the home you are financing is located in. A portfolio loan is a loan that is not sold onto the secondary market to investors. The bank that originates the portfolio loan keeps it as its own. Portfolio loans limits are up to the discretion of the bank that makes them.

It is a good idea to talk to a loan officer face to face to describe what you want to finance and have the officer explain each program you are eligible for. You have a choice of loan broker, walking into a bank or credit union, or contacting a mortgage bank. Mortgage banks specialize in mortgages and generally function as mortgage teller windows for multiple banks. There are no broker fees when using such a bank, also called a correspondent bank. I work for such a bank and would be happy to discuss the specifics of your loan off line by phone or in person so that you would not have to divulge private financial matters on a public forum such as Trulia. My phone number is 408-639-0211. I look forward to hearing from you.

Mitchell Pearce
0 votes Thank Flag Link Wed Oct 5, 2011
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