During the weekend of November 18, 2023, (FNMA) Fannie Mae will be making some changes to the way their loans are underwritten. One major change pertaining to multi-family homes, is the (loan-to-value) LTV ratio, which limits the maximum amount to be financed. Currently, the LTV on a duplex is 85%, meaning the maximum mortgage amount is 85% of the value of the property with a 15% downpayment. The LTV for 3-4 units is 75%.
After the changes, the new LTV ratio will be 95% on multi-family, up to 4 units, making multi-family ownership possible with as little as 5% down when the property is a principal residence. This makes affordable rental housing more accessible and multi-family investments more attainable for beginner investors or those without extra cash for downpayments.
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