Dennis Norman
By: Dennis Norman
Yesterday I posted part one of my E-View TM with H. John Frank, a highly respected mortgage banker that is the President of Paramount Mortgage Co.
Lets continue with part two of the E-View TM:
H. John Frank, Jr., President, Paramount Mortgage
Q-Investors, even those that are very qualified are struggling to obtain financing. Many banks are not willing to lend on non-owner occupied property at all and the ones that will won’t go over 65% or 70% of value in many cases.
What is your take on the financing market for investors? I assume one outlet for financing for rentals would be FNMA? I believe they recently increased the number of loans an investor can have from 4 to 10, is this correct?
A-Loans to Investors are still available but clearly the field has shrunk. Where Fannie Mae has increased the number of “financed” properties any one borrower can have from 4 to 10, most of the major investors (buyers of Fannie Mae Loans) have not changed their guidelines and are sticking with the 4 property maximum (except for the financing of their primary residence).
Once again, it’s all about risk. If a tenant doesn’t make his/her rent payment, most landlords will make their primary house payment before they make their payment on rental property.
Higher loan-to-value loans are still available for investors (up to 80%), but there is a very steep premium on these loans (up to 3-4 points).
Check back for the final post of this E-View TM series tomorrow.
To Read the first post of this series click here
To Read the third post of this series click here
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I have been reading your post. I am an investor that has done well. I have been buying and holding. We have always used cash (from our HELOC) and then rehab the property and refinanced it. we have never had any issues. our credit score is great. On our last property we went to our broker who we have worked with for several years and wanted to refi this property. When he found out that we had NO note against the property he was unable to make a loan….He referred to this as a cash out. We only want to repay our HELOC. So we can continue to buy and hold. we did work with a local bank on several deals. How ever they are unwilling to do a note either….Do you have any suggestions. There are a lot of great deals right now. but our money is tied up.
Thanks Terry