FHA Taps Out At 10 Properties - What Are Our Options?
My partner's got a situation where FHA is refusing to underwrite additional rental properties because they will only do ten before they want you to go to commercial lending. Commercial notes are 20 years, though, which destroy our cash flow.
Are there any other options for funding rentals beyond 10 homes? Anybody else have this problem?
I am no lawyer and am curious to know if anyone can answer. Is the FHA rule still in effect if the properties are purchased in a corporation name...anybody?
Thanks,
Benny
[addsig]
In any situation in which FHA insured position is required, we hold at no more then five. Then we utilize another Borrower Entity. When seeking financing on larger commercial properties which require specialized lenders, we ask for a Due In Full date of whatever, 10-15 years. We ask for a payment plan based on a 30 year payment plan with a due date as per their requirement. This means you have an "Exploder" in 10 or 15 years, so you want to insure that in your portfolio these dates are staggared. Remember that nice Mr. Zekendorf, bought all that NY property, on short time loans and they all fell due together? He had to sell the Empire State Building, Lets see he had three mortgages on it and a leasehold master behind those and four splitters behind that. Big Bill bit his fingernails so hard on that one he started to wear gloves. Almost lost weight. Cheers Lucius