While there is some indication on both sides of the political isle that the United States government may elect to wind down Fannie Mae and Freddie Mac's role in the residential housing markets, borrowers are still likely to have to follow their guidelines for the near future. The vast majority of mortgage lenders and brokers in the country work with lending institutions which adhere to Fannie's and Freddie's lending criteria. These institutions often refine their own guidelines to make them more conservative
Below is a list of some resources that may help real estate investors learn about the programs available to them through lenders who sell their loans to Fannie Mae and Freddie Mac. Keep in mind that each lender may tweak their qualifying criteria so be sure to ask a mortgage professional for additional information on their product guidelines.
Freddie Mac's guide to investment property financing - Defines eligible types of properties and mortgage products which are and are not available. Explains where to find LTV (loan-to-value) requirements and spells out some of their underwriting guidelines.
Fannie Mae investment property financing guideline updates - In February of 2009, Fannie Mae updated some of their eligibility criteria including loan-to-value ratios and underwriting and delivery requirements in the following pdf.
Mortgage rates for investment properties are typically higher than that of primary residences and second homes. Both Fannie and Freddie have adjustments in their matrices which your mortgage lender should be able to explain to you. How big of an impact these adjustments may have on your principal and interest payments may depend upon a number of variables including your loan amount and the coupon spread between various rates for the programs that you are considering. For instance, the coupon spread may not be large enough with an adjustable rate mortgage to have an ARM make much sense. Pricing and spreads for 30 year home loans, 15 year mortgage loans, and other products will vary by investor. The only real way that we know to get accurate quotes is by speaking with mortgage professionals as most online rate tables do not take into consideration adjustments for rental properties.
