Fannie Mae Real Estate Deal

Fannie Mae New Regulation

Why this new regulation is good for us?

  1. Market Corrections Underway
  2. DSCR Rule

No need to worry about personal income or credit score. DSCR covers the credit. Finding a good deal is the key. Not your income or credit score.

DSCR stands for Debt Service Coverage Ratio DSCR 1.55 and 1.45, you will get a loan. DSCR 1.33 and 1.25, lender will consider. DSCR below 1.25, you will not get a loan.

So, DSCR means will NOI cover Prinsble and Interest of a Real Estate Deal. (NOI = Gross income - Expenses) | DSCR Calculator Click Here


SFH(Single Family Home) is usually down 25% with a good credit score

MF(MultiFamily), Now, Up to 4 Units with 5% down

Fannie Mae's new regulation Max Loan is currently $1.39M

FannieMae got rid of the rule FHA75 which required 75% covered by income, but now they get rid of the rule.

There is a real estate correction coming in 2024 on the way. Real Estate experts are saying that we have about an 18-month window. Why the correction is coming? Debt market. $1.7T of debt on the multifamily market.



Where to find up to 4plex deals?


Multifamily Underwriting Example

Number of Units: 12

Rent: $900

Other Income: $0

Occupancy: 93%

Expenses: 40%

Cap Rate: 6%


Actual Income: 48,211

Price to Offer for the deal: 1,205,280


NOI Example for 4 Plex

Will be super city: Miami, Houston TX, Nashville TN, Dallas TX


Under the new Fanniemae regulation, you have to live there for 1 year and occupy the rest with tenants. The default rate in the 4 plex asset class is less than 1%. The single-family home default rate is 6%.


New Fannie Mae Regulation Summary

  1. 2,3,4 Unites Qualify for 5% down payment
  2. Owner occupied within 60 days for 12 months (I will pay my rent. Pay as your tenants pay. So when you leave you will continue getting paid.)
  3. Max Loan is $1.39M (Do a self-finance deal if the property is higher than 1.4M) | 1.4M 5% Downpayment: $70,000
  4. FHA Rule 75 (75% of rental income must exceed the mortgage) was eliminated.


Fannie Mae New Regulation Resources

Read article 1Read article 2