Fannie Mae has good news for investors

As of March 1, 2009, Fannie Mae increases its loan limits from 4 mortgages to 10.

Finally, investors are not snubbed, but being allowed to help in the housing recovery.

In the last 12 months Fannie Mae pulled its stamp of approval of investors with more than 4 mortgages for fear they were risky and toxic. True, some were. Many speculators did get in over their head and create some damage to the housing industry. Many of them used the subprime product, though.

But realistically, the investor with more than 4 mortgages, may have been the professional, savvy, and experienced investor that our economy needs. And we need them active, not with one hand tied behind their back. This is the period where foreclosures are rampant. Some cities are 1 in 34 homes are foreclosures. And some neighborhoods are 1 in 10. These are conditions that investors, people with money, willing to take chances, thrive in.

And when the housing market desperately needs risk taking buyers, these buyers were limited to 4 mortgages. Most of them using one for their Primary.

Not any more. These investors can jump in at auctions, use their capital, and refinance down the road if need be. They can refinance their current properties, that may have adjusted and been quite painful on their monthly budget.Making this change will allow more credit to flow, and release some toxic assets that banks need to get off their books.

OR SO WE HOPE!!! It's all up to the investors.

In short, here are the new guidelines:

720 credit score
25% downpayment for a 1-unit (30% for a 2-4 unit)
No mortgage delinquencies in the last 12 months
6 months of reserves for each investment property.

Fannie Mae Disclosure