This just in from my underwriting department:
Fannie Mae announced a information regarding their policy on renting out a previous home to purchase a new home. The only way rent will be allowed (at 75%) is if that property has 30% in equity as determined by an appraisal. So, to use rental income on a property that was the borrower's previous residence, an appraisal is required on that property. If there is equity of 30% - a lease can be obtained and 75% of it will be used to help offset the payment.
I hope that helps. Probably not the news people want to hear, but it's better to know up front than after putting a deal together and sending it to an underwriter.
Let me know if I can assist you with you mortgage needs.
~ Anthony
Anthony - Thank you very much for posting that, it is hot off the press. I have not gotten that word yet, but it is great food for thoughts. You're always on top of it, keep up with the information.
Stan Barsch
Anthony, Thank you so much for keeping us up to date on these important issues.
Anthony,
Fannie Mae has been hammered with recent losses and it's trying to stem the tide. One step is to tighten these investment property guidelines, as there has been some abuse with them. Good info.
Another creative way to sell the homes we have on the market! Great post
Thanks for posting that information ....I always know where to get the hotest news--AR blogs.
Like you I'd rather know in advance and adjust accordingly.
Best Regards,
Paige Rausch
Anthony,
I believe that is only if you need the rental income to qualify. If your debt ratio is in line using the full mortgage payment on the rental against current income, then I believe all is ok.....
Lewis, that is correct - assuming current income isn't on a Schedule E :)