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.
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
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
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.
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.