Fannie - new rules for New primary residence

[andviv]

I read this today in a newsletter:

From Fannie Mae:
If a borrower is buying a new primary residence and the old primary residence is being retained as an investment property, the new rules are:

• The property must have a minimum of 30% equity and the borrower must have a minimum of two months’ PITI per property to qualify.
• Borrower must provide a notarized copy of a lease.
• Borrower must provide proof that the security deposit was deposited in their bank account – cancelled check or statement.

Has anybody heard anything about this? I think this will make things way more difficult to those that want to start investing by moving to a new house and renting their old one.

Source of this: http://www.lassitermortgage.com/insights-0808.pdf

 

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[Talkintoy]

I read this today in a newsletter:

From Fannie Mae:
If a borrower is buying a new primary residence and the old primary residence is being retained as an investment property, the new rules are:

• The property must have a minimum of 30% equity and the borrower must have a minimum of two months’ PITI per property to qualify.
• Borrower must provide a notarized copy of a lease.
• Borrower must provide proof that the security deposit was deposited in their bank account – cancelled check or statement.

Has anybody heard anything about this? I think this will make things way more difficult to those that want to start investing by moving to a new house and renting their old one.

Source of this: http://www.lassitermortgage.com/insights-0808.pdf

Not quite sure but great info... Thanks!

 

[tbsells]

I got this info emailed to me by one of my good loan officers. Obviously, they are trying to close all the loopholes. Its getting tougher all over.

 

[rxcknrxll]

Yeah they're really doing everything they can to make sure investors are the ones who take the brunt of the real estate correction. I've heard the new rules that down payment assistance like Nehemiah is gone and they've upped the down payment requirements for FHA, which both hit almost purely residential purchases. So overall it's not ONLY investors that are taking hits, but it sure feels like that sometimes.

 

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[AroundTheWorld]

Thanks for the re-direct Andviv. (and + for the topic!)

This is honestly insane. It is a huge hindrance, and it will push even more people into financial trouble.

As the economy suffers, people will be relocating because of job loss, business failure, better cost of living. Relocation means - they will either need to sell or rent their house.

Selling isn't happening these days, so the most prudent answer is to rent. That certainly makes more sense than leaving the house vacant!

The policy makers right now just seem to be in HUGE over-react mode. They did make some screw ups in the past, but the over compensation is only going to make the economy worse, worse, worse. It is almost as if they are making these decisions based on emotion - not intellect.

 

[andviv]

I think they are just trying to close ALL loopholes, everything that does not fit the "20% down, primary residence" will get shutdown temporarily. The big problem for me now is how to work around this, as SFHs was how I was making money to invest on the apartment building deals. I simply never expected it to become this weird.

 

[Runum]

I read this today in a newsletter:

From Fannie Mae:
If a borrower is buying a new primary residence and the old primary residence is being retained as an investment property, the new rules are:

• The property must have a minimum of 30% equity and the borrower must have a minimum of two months’ PITI per property to qualify.
• Borrower must provide a notarized copy of a lease.
• Borrower must provide proof that the security deposit was deposited in their bank account – cancelled check or statement.

Has anybody heard anything about this? I think this will make things way more difficult to those that want to start investing by moving to a new house and renting their old one.

Source of this: http://www.lassitermortgage.com/insights-0808.pdf

Thanks for posting this Andres. The rules of the game are definitely changing. ++++speed

 

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[hatterasguy]

It so hard to get money these days, we are doing everything with cash. Luckly interest rates suck, so its not that hard to get people to lend you money at say 10% for 6 months. Better than let it rotting in the bank, or a CD.