With all the bad news about Wall Street and the credit market, with banks unwilling to loan money even to each other, what hope is there for the average real estate investor? The situation may not be as bad as you may think!
Here’s why:
1. There is plenty of money available for home mortgage loans, either to purchase or refinance a house. This is because the American home mortgage market has been federalized. Ninety percent of all loans are being made through the Federal Housing Administration (FHA), plus Fannie Mae and Freddie Mac. FHA is owned by the federal government and Fannie and Freddie are operating under federal conservatorship, so all three have complete access to global capital at low rates because their borrowings are guaranteed by the Treasury Department.
2. Despite tougher credit standards, you can still get a loan for 3 percent down
with FHA, or 5 percent down on Fannie Mae and Freddie Mac programs.
3. Interest rates are still at historic lows.
4. Home prices, dragged down by foreclosures and short sales, are at 2003 and 2004
prices.
For more details see Kenneth Harney’s article Crises Aside, Would-be Buyers Can Still Get Reasonably Price Loans.
Info on Terry's Book
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4 comments:
the only problem with getting financing for investment properties is the four mortgage limit by convential lenders right now.
the lowering of the limit from 10 to 4 really caused a problem for me.
Yes, so how do we as investors get financing unconventionally? Who's offering and where do we find them?
Anonymous,
I have gotten loans from family & friends but have never sought hard money loans from other unconventional lenders.
Another option is to purchase the fifth house as an LLC.
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