Fannie Mae’s New Changes: A Boost for Multi-Family Homebuyers and Homeowners

In the ever-evolving world of real estate financing, staying updated with the latest changes is crucial. That’s why we’re excited to share some significant updates introduced by Fannie Mae that will greatly benefit potential and current homeowners, especially those eyeing multi-unit properties.
What’s the Big Change?
Increased Loan to Value (LTV) Ratios:
One of the major announcements is about the LTV. LTV is a crucial term in the mortgage industry; it essentially indicates how much of a home’s value you can borrow. The higher the LTV, the more you can borrow without increasing your down payment.
Previously, for two-unit homes, the maximum allowable LTV was 85%, and for three- or four-unit homes, it was 75%. Now, with Fannie Mae’s recent update, you can borrow up to a whopping 95% of the home’s value for 2-4 unit homes. To put it simply, if you’re looking at a property valued at $100,000, where once you might have been able to borrow $85,000 (for a two-unit home), now you can borrow up to $95,000. This is a significant boost and can greatly influence buying decisions.

Enhancements for Green Homeowners:
For those who are environmentally conscious and are planning to make energy improvements in their homes, Fannie Mae’s system has improved its identification of loans specifically meant for energy improvements. This streamlined identification will make the loan process smoother for those pursuing energy-efficient renovations.
Enhanced Down Payment Options: Additionally, the down payment requirements for Fannie Mae 2-4 unit properties have been updated to allow up to 95% loan-to-value (LTV) ratios. This means that borrowers can now put down as little as 5% of the purchase price or appraised value of the property. These changes open up more financing options and offer the potential for homeownership with a lower upfront cost.
Key Takeaways
  • Fannie Mae’s new guidelines allow up to 95% Loan-To-Value (LTV) on 2-4 unit properties.
  • These guidelines include requirements for owner-occupancy, investment properties, and refinancing.
  • The changes increase the maximum LTV ratio for two-unit properties from 85% to 95%, and for three or four-unit properties from 75% to 95%.
  • Borrowers can use potential rental income as qualified income when applying for financing.
Mark the Date!
These updates aren’t just theoretical; they’re going live soon. Circle the weekend of November 18th, 2023, on your calendar because that’s when these changes will be activated.
How Can You Benefit?
Now, with all this information, you might wonder, “How does this affect me?” or “How can I make the most of these changes?”
That’s where we come in. At Prime Choice Funding, we’re dedicated to helping you navigate these changes and all your other financing needs. Whether you’re a first-time homebuyer, an investor, or someone looking to refinance, our team is geared up to guide you every step of the way. Contact us today to learn more about how these updates can be advantageous for you and how we can assist you in achieving your homeownership goals. (877) 787-7463 or click here to get started.