Posted by Ed Garcia on August 12, 1999 at 10:23:12:
Mark IL:
Sorry I took so long, I?ve been busy and missed your question.
What you have stated is true, except that Fannie Mae and Freddie Mac
would also be governed by ratios and credit ratings as well as a
credit score.
What happens when investors go over the quota allowed by Fannie Mae
and Freddie Mac, is they go to a portfolio lender or to the secondary
market. That?s why many times I suggest to see if the property that your
buying has a assumable loan. If so you can get a gap loan or a second
money purchase loan.
I have been told that a RE investor will be limited to around 4 - 6 conforming mortgages – after that they will be refused due to limits imposed by mortgage buyers (FANNE MAE, etc.) I have also been told that portfolio lenders who hold mortgages as investments in their own portfolio, will not impose such limits on the number of mortgages a REI can have. This would instead be governed by their income ratios and their credit rating. Is this true?
How, then could an investor get say 2 dozen mortgages and buy 2 dozen houses? Is this mainly limited by the amount of monthly cash flow those houses generate?
Thanks in advance for your response. I always enjoy and learn from your replies.