Another 2021 Shocker in the Mortgage World announced on March 10 2021. Second homes and investment properties will be taking a HUGE hit!
Fannie Mae came out with an announcement on March 10, 2021 stating:
Recent amendments to our senior preferred stock purchase agreement with Treasury impose additional risk criteria on the loans we acquire. One of those restrictions is a 7% limit on our acquisition of single-family mortgage loans secured by second home and investment properties.
These policies are effective for whole loans submitted to our Loan Delivery system on or after Apr. 1, 2021, and for loans delivered into MBS pools with issue dates on or after Apr. 1, 2021. After this date Loan Delivery will apply a “Fatal” error for loans that do not meet the above requirements. Due to our need to comply with these restrictions in the Treasury agreement, we will be monitoring deliveries of second home and investor loans on a lender-level basis, and will be working with lenders that have excessive delivery volume of these types of loans.”
What this means effective immediately is 2nd homes and Investment properties just got a lot more expensive to buy, sell or refinance. Fannie and Freddie can only have 7% in their portfolio.
This is part of a deal cut by the Treasury to get Fannie and Freddie our of conservatorship.
Here is a copy of the letter and a link to apply if you are looking to refinance an investment property – now is the time!