Could investors help the housing crisis that we’re experiencing?
My answer of
course is ‘yes’.
article in the Dallas Morning News told a sad story about a couple who
purchased their home in 2006 for around $90,000 and had to do a short sale for
$35,000 this year. That’s a horrible story but unfortunately not an unusual
one. It is not just Dallas; nor is it one section of the city. It’s
happening across the country. And it is my guess that an investor bought this
home and will put a renter it.
the guidelines for loans are different now and much more rigorous following the
meltdown a couple of years ago. A few years back I would actually be able to
help you purchase an investment home with either one loan for 100% or a
combination loan called an 80/20. It was a unique product that was not
used everywhere. GMAC offered it and it was adopted by many. Well, that
obviously went away and now the new loan has gone a little bit more aggressive.
Want to buy an investment property? Bring 20% to the table. Want to get a
better interest rate? Bring 25%.
One of the
guidelines through Fannie Mae and Freddie Mac; they’re what’s called overlays
on a file the Lender who starts the loan needs to adhere to. For Fannie,
it says an investor cannot own more than four properties; Freddie’s rules say
more than 10 properties. I understand that we need to be risk based and be
careful of how we lend, what I don’t understand is that if a person has
the means and the ability, and is good at being a landlord and an investor, why
do we limit this? Why do we limit the number of homes they’re allowed to
purchase? I’m sure it’s a long winded answer, talking less about the
risk and requirements, but more about trying to get them into a more commercial
don’t have all the answers but sure do wonder if this guideline were to be
changed, would savvy investors pick up a few more homes?
Geoffrey Davis – the “Frisco Mortgage Guy”!
is the #1 website for all things Top 10 in Dallas – and I am ranked as a Top 10
Honored as one of the Best Mortgage Brokers in Dallas!
for D Magazine, 2011 & 2010. Ranked 24th
in 2010 in the category Largest North Texas Residential Mortgage
Lenders, according to the Dallas Business Journal!