In Austin, there are real estate bargains to be had by bargain hunters but the mid sized investor has been side lined do to the 4 property limit imposed by Freddie Mae and Fannie Mac.
Freddie Mac Fannie Mae rethinking investor loan limits
The previous limit was 10 homes. And most mid sized investors will easily reach the 4 home limit. Your primary residence is counted in the 4 home limit. This new limit pushed many small investors out of the game because they have to seek higher cost financing from non Freddie Mac/Fannie Mae sources.
At this point, we dont know which agency is rethinking the policy as we have not had any official communication from Fannie Mae and Freddie Mac. I picked up on this rumor by respected Realty Times Contributor Kenneth Harney in his article Investor Report: Rethinking Controversial Limits .
Lets hope this is really going to happen. PMI insurance wont underwrite investor properties — so investors have to put down a 20% downpayment or find an expensive, elusive 2nd mortgage. So the deals have to be really good to motivate an investor to take action. If we can participate in favorable financing , that will sweeten the pot.
