Financing in Massachusetts>Question Details

Anna Moretti, Home Buyer in Wakefield, MA

I currently have 4 conventional mortgages, 1 being my primary home, and 3 on investment property. I also have an HELOC on 1 on of the investment prop

Asked by Anna Moretti, Wakefield, MA Tue Apr 23, 2013

I would like to take another conventional loan on my 4th investment property but I am being told that I can only have 4 conventional loans and if I want to refinance my 5th property I need to go through a portfolio investor at a very high rate. Anybody know what the law is in Massachusetts on conventional loan limits / HELOC

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This is true. Try to find a private lender/investor and offer them 5% apr on their investment. This gives you the leverage you need to invest in other investment properties with 100% financing, and the investors money is secured by the property.

Good Luck, Joe
0 votes Thank Flag Link Wed Apr 24, 2013
There is no longer in Massachusetts that dictates how many of your property can be mortgaged. Call around and shop you'll be able to find somebody that can help.
0 votes Thank Flag Link Wed Apr 24, 2013
To help clear things up I feel I need to clarify a few things.

The terms "conventional" and "conforming" are so often misused that people don't even notice anymore. It happens to be one of my pet peeves .

What is a conventional loan:

Well, it's very simple, a conventional loan is not insured or guaranteed by the federal government. Therefore, a portfolio loan is a conventional loan so if someone said you cannot get conventional financing for more than 4 properties, they would not be telling the truth or they have no idea what the term conventional means. Conventional loans have no limits and no guidelines other than they are not government backed.

What is a conforming loan:

A Conforming loan is one that conforms to standards set forth by government-sponsored entities Fannie Mae and Freddie Mac. The 1-4 property rule and no cash out for 5-10 is a conforming guideline, not a conventional guideline.

Loan amount is one parameter that often determines conforming eligibility. Currently the highest conforming loan limit is $625,500 in MA. A loan amount above this would still be a conventional loan, it would just be a non-conforming conventional loan. The financing that you need assuming you need to cash out your 4th rental and you did not buy it within the last 6 months is a conventional non-conforming mortgage.

I hope this helps with the terminology, it's very hard to understand the advice given when people consistently use the incorrect terminology. Sorry to say, agents are notorious for this and make life miserable when they do.
0 votes Thank Flag Link Tue Apr 23, 2013
What you said is sort of true but not exactly. You can have 10 financed properties with Fannie Mae (Conforming). The reason you are having difficulty is because you cannot cash out the 5th property. I am assuming it's paid for by what you posted. If you wanted to buy another investment property you would have no issues so it's incorrect to say you can only have 4 conventional loans. You can have 10 conforming loans and as many conventional ones as you like. You can only cash out loans 1-4 unless they qualify for Fannie Mae's Delayed Financing exception. If you purchased any of the properties within the last 6 months with all cash you may be able to get financing on properties 5-10. If you didn't then you will need a non-conforming lender.

Slightly confusing but an experienced loan officer in MA should be able to walk you through it. If you would like a good referral to someone who actually understand this, rather than a random referral from an agent, please let me know.
Web Reference: http://WeFixRates.Com
0 votes Thank Flag Link Tue Apr 23, 2013
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