What are the guidelines for investment properties under Fannie Mae?

Fannie Mae offers specific guidelines for investment properties, which are properties purchased primarily for generating rental income rather than for personal use. It is important for potential investors to understand these guidelines to ensure compliance when seeking financing through Fannie Mae. First and foremost, Fannie Mae requires that the borrower be qualified based on their creditworthiness, income, and debt-to-income ratios. The minimum credit score typically required for investment properties is higher than that for primary residences, making it essential for borrowers to maintain strong credit profiles. In addition, Fannie Mae allows financing for up to four units in a property, which can include single-family homes, multi-family residences, or condominiums. However, the guidelines stipulate that borrowers may own no more than ten financed properties, including their primary residence, which is a crucial consideration for aspiring investors. Lenders generally require a higher down payment for investment properties, often ranging from twenty to twenty-five percent of the purchase price. Furthermore, Fannie Mae also mandates the consideration of rental income when qualifying for the loan, which can help offset the mortgage payment. Borrowers should also familiarize themselves with the specific documentation needed to demonstrate rental income, such as lease agreements and tax returns. For detailed and up-to-date information, it is advisable for interested parties to visit the official Fannie Mae website, where they can find additional resources and guidelines tailored to investment properties.