Unfortunately, we have some bad news for those of you who may have been looking into getting an investment property or a vacation/second home. This holds true for Fannie Mae. It is likely that Freddie Mac will become more difficult as well. (Thankfully this will not affect any customers who already have an agreement set in stone…this will start on April 1.)
The Federal Housing Finance Agency (FHFA) is who set this new rule into place. They are decreasing the amount of Fannie Mae and Freddie Mac investment or second home loans in half. Once Fannie Mae and Freddie Mac have 7% of their loans being second homes, they will not be able to purchase any loans from anyone after closing.
For those borrowing money, this means that the loan cost will be increased. This is because lender will be more at risk. Penny Mac is a company that holds many second home loans currently. They have already added a 2.25% fee onto their loan amount for second home loans. This even holds true for those who have made a 25% (or more) down payment! If someone put down less than 25%, they have an additional 5% fee that will be added to their loan.
At this moment, we are unaware of the rules to qualify for an investment property mortgage will change, but we have a feeling that it will. Since lenders will not be able to have as many of these loans as they once had, the requirements will likely be more strict since the lender will have to be more selective.
Keep in mind this will not hold true for all options available out there. But for the main ones where Freddie Mac and Fannie Mae are involved, we can guarantee that those will be affected. It is possible that there may be some new programs available to complete. (This is completely conjecture!)