In the recent months, investors were basically shunned by Fannie Mae in that the investor was unable to finance investment mortgages if the borrower already owned 3 other investment properties with a mortgage on them. But starting March 1^st, Fannie Mae will reverse their earlier decision and allow investors to own a total of 5 – 10 financed properties if they are eligible and meet their underwriting standards.

1. No bankruptcy or foreclosure in the past 7 years and pristine repayment on other mortgages
2. Documentation of rental income for new mortgage property and revenue history on other investment properties owned
3. 2 years of income tax returns
4. Applicants owning 4 or less properties will need 6 months of bank reserve to support the new purchase and 2 months reserve for the other investment properties they own. Borrowers owning 5-10 properties will need to show 6 months of reserves available for each property.

With mortgage rates dropping by ½ point almost overnight on a 30 year loan and the Government plan to buy $100 billion of Fannie Mae and Freddie Mac bonds, I am hopeful that we will see definitive results in home purchases.

With the stock market’s volatility of late, should the savvy investor be looking to something real and tangible---namely real estate? There is something to be said for an asset that you can see, touch and feel. Certainly I am aware that a real estate investment requires some maintenance, has property taxes and insurance expenses, etc. However, I personally am looking today at something that is truly tangible, and with real estate you can usually even have the advantage of tax benefits.   Regardless of the market, real estate has definite intrinsic value that cannot evaporate into thin air. 

The bill which was made law the end of July will cause changes for 1031 investors and what they can exclude from taxable income when they sell a property. Currently a property would have to be owned for at least 5 years, and used as a principal residence for at least 2 of those 5 years, to qualify for up to $250,000 to be excluded as taxable income and up to $500,000 for a married couple. Even if the property was used as a rental property, as long as the 2 year criteria was met the income was not taxed.