Finance Options

Reaching the Fannie Mae maximum financed-property limit.

What other options are available for financing?

Do you mean 10 financed units, or for some banks, 4 units, plus a primary?

If 10ish and you’re moving on to the 11th, non-conforming loans will often have no limits on the number of financed properties. These banks will have “number of loans you can have financed with that particular bank” restrictions instead. You’ll need to find rental properties at a price no less than $732,000 as with 25% down you will run into the maximum standard conforming loan limit of $548,250. Jumbo lenders can finance $1 to $100 over standard Agency Conforming loan limits.

If your price range is lower than $732,000 then you may have to go with Non-QM lending and suffer the rate consequences. Non QM often also requires 30 percent down or more.

I know many investors were thrilled to lock in a sub 3% rate on their rentals during the bottom of this rate cycle. If you have equity in any of your properties, I’d either combine the loans into 1-2 properties (rates for cash out investor will be in the high 4’s, but at least you can buy another property elsewhere) or obtain a Non-Owner Occupied HELOC through PenFed or Bank of the West, then use the HELOC’s to pay off one or more of your financed homes. This tactic will disrupt your rate benefits, but this isn’t a question of rate but one of ability to purchase. Rate questions can be settled later.

It may be possible to get a single purpose loan through a business bank that can then put all of the properties under an LLC. I’d recommend talking with your CPA first, then a portfolio bank like First Republic.

Thanks for reading,

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Thanks for responding @LbJW . I mean 10 financed units including primary and my rate lock is below 3%

Will check with PenFed or Bank of the West for Non-Owner Occupied HELOC. Hope 10 financed units will not be an issue for obtaining a HELOC

From what I’m told it’s not. I can’t say that every Non-Owner unit you have will be able to get a HELOC, but many will. If you have a sizeable credit union they may have specialized programs also. I know of a credit union in San Diego that offers non-owner 2nds as well, but PenFed and BotW are companies I have seen produce these seconds. I’ve not personally closed a HELOC through the credit union.

Best, LbyJW

Congrats? :slight_smile: :slight_smile: :slight_smile: