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Finance More Than 4 Properties With The 5-10 Properties Program

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Finance More Than 4 Properties With The 5-10 Properties Program


In February 2009, Fannie Mae rolled back a rule preventing real estate investors from financing more than 4 properties at a time.  The limit raised the maximum number of allowable, financed properties to 10.

The program provides bona fide investors with an avenue to add to their respective real estate portfolios.

Yes, You CAN Finance With 5-10 Homes

In its official announcement, Fannie Mae said upping the financed-property limit would help stabilize housing nationwide.

"Experienced investors play a key role in the housing recovery", it said.

2 years later, however, finding a bank that offers the 5-to-10 Properties Financed program is a challenge. Most lenders won't give a mortgage on the 5-10 Properties program as a matter of policy.

It's cause for consternation among the real estate investment crowd.  Fannie Mae says it will buy the loans; banks should be willing to do them. Few are.

Why Some Banks Won't Offer The 5-10 Properties Program

So, why don't all bank participate in the 5-to-10 Properties Financed program?

The probable answer is that underwriting a 5-property-owning investor's mortgage application is hard work.  "Traditional" homeowners submit for loan approvals with just a basic W-2 and paystub for an approval.  Bona fide real estate investors, on the other hand, submit for approval with complex tax returns, REO schedules, and a ton more details to reconcile and verify.

It's far quicker to underwrite and approve a standard loan as compared to a 5-10 Properties program loan. However, both loans are valued the same when bundled for Wall Street securitization.

In other words, the 5-10 Properties program is more work for same profit.  It's no wonder most banks don't do it.

Some will, however.  You just have to know where to find them.

And you have to meet their guidelines.

The 5-10 Financed Properties Program Criteria

To purchase and finance a home through Fannie Mae with more than 4 existing financed properties, investors must meet all of the following criteria:

  • Own between 5-10 residential properties with financing attached
  • Make a 25 percent downpayment on the property; 30 percent for 2-4 unit
  • Minimum credit score of 720
  • No mortgage lates within the last 12 months on any mortgage
  • No bankruptcies or foreclosures in the last 7 years
  • 2 years of tax returns showing rental income from all rental properties
  • 6 months of PITI reserves on each of the financed properties

For refinances, loan-to-value is capped at 70% for all property types.

And then, as a last step to reduce fraud, Fannie Mae's multiple property program requires applicants to sign a 4506-T -- a form giving lenders permission to verify your submitted-with-the-loan tax returns against the official, IRS-filed version of the same.

Where To Get A 5-10 Properties Program Mortgage

If you own more than 4 financed properties and want to purchase a fifth one (or sixth or more); or, want to refinance a home you already own, let your first call be to Joe Wagner at 612-327-4544.


Have questions about Multiple Property Loans? Call Joe Wagner at 612-327-4544. It's his job to answer lending questions, so he is happy to help! We know you're busy, so feel free to complete the form below to be contacted by Joe Wagner.

E Frank Francone

I have just purchased for cash two properties in Miami Fl. I am told that I need to wait 6 months to refinance the properties. I am an investor and hope to finance multiple properties through the fannie mae/freddiemac channel. Also, it is not clear how the two years of owning rental properties comes into play. I have owned rental properties during the 2000-2003 period, but not in recent years. Does this requirement have to apply to the specific properties I am trying to finace now? Thank you

Apr 23, 2013 03:24 AM
Joe Wagner

The requirement for using rental income to qualify goes off of the "previous" 2 years and not beyond that. Therefore, the rental properties owned in 2000-2003 does not satisfy ther requirement.

As far as being able to refinance 2 free & clear investment properties:

You can only do this within the first "6" months from the purchase date. This is known as the Delayed Financing Exception Rule set forth by Fannie Mae. The new loan amount cannot exceed purchase price and/or additinoal acquisition costs when property was purchased.

After owning the property for 6+ months, it is extremely difficult to find a lender that will put a mortgage on a free & clear investment property. I know this sounds crazy, but it's true. I run into this all the time.

I am only licensed in Minnesota so I won't be able to help you if the properties are located out of Minnesota.

Hopefully this answers your question. Feel free to contact me on the phone if you have additional questions.

Joe Wagner


Apr 23, 2013 05:42 AM