THE Blog

There’s good news and bad news coming from Freddie Mac.

Ok, the good news first…

Freddie is following suit with Fannie Mae, in that the dreadful "declining market" is a thing of the past. No longer will either Freddie or Fannie require an additional 5% down payment from home buyers in the areas most hurt by declining values. The problem still persists because the Mortgage Insurance companies still have the last say if the down payment is less than 20% and requires MI!  Yes, that’s the good news…

The bad news from Freddie Mac is that for Investment Property Mortgages, a borrower who owns more than one financed property may not own more than four properties that are financed, including the subject property. That is, they will reduce the number of FINANCED properties allowed, from 10 down to four properties owned under any one entity! That fifth property will not be able to be financed. Unfortunately, holding properties in an LLC or similar, may not help if you’re still responsible for the mortgage. It hasn’t been announced yet, but Fannie Mae may similarly revise their policies as well.

There are other changes from Freddie regarding refinancing. It is now required that a property must be owned more than 6 months in order to consider a cash out refinance.