This “heads up” is courtesy of Tenley Stephens, Vice President, SunTrust Mortgage, Inc.

Fannie Mae and Freddie Mac have now increased the minimum discount points required for investment property mortgages.
LTV’s of 75% or less: 1.75% in Discount Points
LTV’s or 75.01% – 80.0%: 3.00% in Discount Points
LTV’s of 80.01 – 90.0%: 3.75% in Discount Points

Lender’s can charge a higher rate to possibly absorb some of the discount points, but the higher rate may not make the “math” work for the investor. This means that you may see a lot more investment properties purchased with cash.

Filed under: Financing, Investment Property