Fannie Mae Tightens Standards Loans on Investment Property

In a letter sent to sellers on Wednesday (3-10-21), Fannie Mae, the government sponsored entity (GSE), said it was tightening the underwriting criteria for second homes and investment properties. The change in policy will take effect for loans submitted to Fannie’s loan delivery system on or after April 1, and for loans delivered into MBS pools with issue dates on or after April 1. In explaining the changes Fannie Mae said, “Recent amendments to our senior preferred stock purchase agreement with Treasury imposes additional risk criteria on the loans we acquire. One of those restrictions is a 7% limit on our acquisition of single-family mortgage loans secured by second home and investment properties.” Previously, both Fannie Mae and Freddie Mac tightened their underwriting standards in response to the coronavirus pandemic.

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Fannie Mae tightens standards on investment properties