On today’s show we are talking about a new program being offered by Fannie Mae that theoretically should make real estate more accessible than ever. 

Starting the weekend after November 18, 2023, Fannie Mae will allow 5% down payments for owner-occupied 2-, 3-, and 4-unit homes.

We don’t know exactly what the underwriting rules will be. The announcement was buried deep in the Desktop Underwriter and Desktop Originator Release Notes dated October 4. The version 11.1 release of the software will be rolled out on November 18. This software is used by loan originators who work with Fannie Mae to determine whether a borrower will qualify for a Fannie Mae Loan. 

As real estate investors in the commercial space, we are familiar with underwriting requirements. In particular, a property must generate enough income to more than cover the debt. The Fannie Mae announcement makes no mention of a debt coverage constraint. They typically use the debt to income ratio as a proxy for affordability.


Host: Victor Menasce

email: podcast@victorjm.com