How many conventional loans can I have?
Fannie Mae caps you at 10 financed properties when the home you are buying is a second home or an investment property. When the home will be your main residence, Fannie Mae sets no cap, except HomeReady loans, which allow two. Each extra financed property raises the reserves you need, and lenders can set tighter limits of their own.
Educational answer from Mortgage Expert. Mortgage Expert's licensed loan originator is Shahram Sondi, Florida mortgage broker, Certified Mortgage Advisor™, NMLS 186790. Sources checked .
How it works
What counts as a financed property
Fannie Mae counts one- to four-unit homes where you are personally on the mortgage. A duplex counts as one property, not two. Your own home counts if it has a mortgage, and so does the home you are buying.
Properties owned jointly with a co-borrower count once. Commercial buildings, buildings with more than four units, timeshares, vacant lots and a manufactured home on leased land that is not titled as real property do not count. A rental financed only in an LLC's name, where you are not personally on the loan, is also left out.
The limits by home type
Buying a second home or a rental: up to 10 financed properties through Desktop Underwriter (DU), Fannie Mae's automated system. Fannie Mae requires DU for these loans anyway.
Buying a home you will live in: no Fannie Mae limit, unless it is a HomeReady loan, which allows two. Freddie Mac has its own rules, and a lender can choose a lower cap than either agency.
Why more properties means more reserves
Reserves are money left over after closing. When you buy a second home or a rental, Fannie Mae adds reserves for your other financed properties. It is 2% of their combined unpaid loan balances if you will have one to four financed properties, 4% for five or six, and 6% for seven to ten.
That total leaves out the home you are buying, your own home, homes sold or under contract, and loans paid off at closing. You also need the normal reserves for the new home: six months of its full payment for a rental and two months for a second home.
Counting properties and reserves for a sixth rental
Illustrative example. This is not a real borrower, offer or quote. The payment and balances are assumptions, and DU may ask for more.
A buyer owns a home with a mortgage and four rentals with mortgages. The four rentals have $800,000 in combined unpaid balances. The buyer is now buying a fifth rental. Its full monthly housing payment is assumed to be $2,500.
| Item | Amount |
|---|---|
| Financed properties after closing | 6 |
| Reserve rate for five or six properties | 4% |
| Reserves for other rentals | $32,000 |
| Six months on the new rental | $15,000 |
| Total reserves needed | $47,000 |
The math, step by step
- Count: own home (1) + four rentals (4) + new rental (1) = 6 financed properties.
- Other rentals: $800,000 × 4% = $32,000. The buyer's own home and the new rental are left out of this total.
- New rental: $2,500 × 6 = $15,000.
- Total: $32,000 + $15,000 = $47,000 left in the bank after closing.
Takeaway: With six financed properties, the rate on the other rentals is 4%, twice the 2% rate for one to four. Count your properties before you shop, because the tier can change your cash needs.
Easy things to get wrong
- Your own home counts toward the total if it has a mortgage, even though it is not a rental.
- A duplex or fourplex counts as one financed property, not two or four.
- A rental in an LLC's name only is left out of the count, but a loan you are personally on is counted even if its payment is left out of your debt ratio.
- Lenders can set a lower cap than Fannie Mae. Ask about the lender's limit before you apply.
What to do next
List every property where you are personally on a mortgage, then add the home you are buying. Use that count to find your reserve tier.
Own several financed homes? Shahram Sondi can count your properties the way Fannie Mae does and add up the reserves before you make an offer.
Check the sources
- Fannie Mae Selling Guide B2-2-03: multiple financed properties for the same borrower
- Fannie Mae Selling Guide B3-4.1-01: minimum reserve requirements
Sources checked . Program guidance and lender requirements can change.
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Educational only. Conventional loan guidelines, lender overlays, rates, fees, PMI, LLPAs, and underwriting requirements can change. Final eligibility depends on full underwriting review. Mortgage Expert, Inc. is not affiliated with Fannie Mae, Freddie Mac, FHFA, or any government agency.
