Stephen Bighaus joins us today to share changes that have occurred with Freddie Mac.
Listen closely as Stephen Bighaus breaks down the changes with Freddie Mac and how they impact you as a real estate investor.
Mike: Welcome back to the FlipNerd.com REI Classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. Now, let’s meet today’s expert host.
Steve: This is Steve Bighaus with Security National Mortgage, host of the REI Classroom. This morning we’re going to talk about a few changes that has transpired with Freddie Mac that are going to be advantageous to the investors’ community.
Mike: This REI Classroom real estate lesson is sponsored by uglyopportunities.com.
Steve: As you’re well aware, Freddie Mac did make some changes back in November. They increased their number of financed properties from four to six. They did away with their landlord history experience requirement. And they’ve also got the availability, if there is a lease on the property, that they’ll utilize that rental income, 75% of that rental income, to offset the payment.
Now little bit of a difference with Fannie Mae, they still have where you can do either the lease agreement, or you can utilize the figure from the appraisal if it’s a purchase transaction. So not quite the same but still a good move.
And then last month, at the end of the month, Freddie Mac came back out on a rate and term refinance. So basically, we have some borrowers that we’ll purchase money with private money, and then they want to refinance it. So they moved that loan devalue restriction from 75% to 80%, but it’s got be tied to an initial purchase transaction up-front.
Like I stated earlier, the way people facilitate that is that they’re going to purchase with hard money, and once they’ve purchased it, now all of a sudden they have a hard-money loan, then they could immediately turn around. There’s no seasoning, so they did away with the 120 days season requirement, they can immediately turn around, start the refinance on the property. We can run it as a rate and term refinance and utilize the appraised value to drive the loans value. So that’s big news for the investors. Like I say, I see a small portion of my business in that, but those are some big changes.
We’re starting to see some changes within Fannie Mae and Freddie Mac. The changes with Freddie Mac were very welcome, still not quite as good as Fannie Mae.
Steve Bighaus, Security National Mortgage, host of the REI Classroom, and pleasure talking with everybody. Thank you.
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