Alert - Fannie Mae Changed its Guidelines: Sept. 5, 2008 

On Friday, September 5th 2008, Fannie Mae issued an announcement pertaining to what most of us expected was coming. This has been a topic misunderstood by many investors and even mortgage brokers. Over the last several months many posters have incorrectly stated that Fannie changed their guidelines. Although many lenders implemented their own internal change, Fannie Mae had not until last week. The effective date is supposed to be December 1, 2008 but you'll probably see that many of those remaining true Fannie lenders will change by October 1, 2008.

The major changes include:

* A limit of 4 financed properties per borrower when submitting an investment loan - Fannie Mae also clarified that it does not consider the borrower to have an ownership in a property that is held in the name of a corporation, even if the borrower is the owner of the corporation. Those properties would not be counted towards the limit.  In the event you already have four financed properties, EDC will allow you to add a co-borrower to your loan so long as the co-borrower qualifies for a refinance loan and does not have four financed properties.

* 6 month seasoning  for cash out refinances - A rate/term refinance of an existing lien (unless that lien was a for a cash out refinance) will not have a seasoning restriction. If you purchased for cash and there was no lien then this rule would apply. 

* Investment properties listed for sale on the MLS within the last 6 months can be done as cash out up to a maximum 70% LTV. 

EDC services several markets from the East Coast to the Midwest. You can view a map of our coverage areas and get to know your EDC Territory Director by clicking here.

To apply for a loan with EDC today, please complete our easy, online loan application.

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