Fannie Loosens Credit Restrictions on Investors

Yesterday you read about consumer spending rising in January and foreclosures plummeting. That's good news for home owners looking to stay in their houses or needing to sell in this housing market.

But there is more warmth for seasoned investors looking to buy real estate in this market.

Last week Fannie Mae announced that it would loosen several of its loan restrictions for real estate investors and second homebuyers. It enumerated a set of new guidelines designed to attract landlords and other low-risk speculators into the current market.

“Fannie Mae is committed to providing financing opportunities for high-credit quality, bona fide investors,” said Fannie in a press release. “Experienced investors play a key role in the housing recovery and Fannie Mae’s continued support for investor borrowers is consistent with its mission to provide stability, liquidity and affordability to the nation's housing system.”

The new Fannie Mae guidelines allow investor and second home borrowers to qualify for Fannie-backed financing on up to 10 properties by following strict underwriting requirements. Prior to the new rule, Fannie had a “four property limitation” for those investors.

The change will go in effect on March 1, 2009.

For those of you following the Buffett model, "now is the time to invest and get rich."