Fannie Mae rules

by Linda Stone on March 14, 2010

I bought a house in May 2009 in California. My job was transfered to Oahu so I had to move. Now I can’t buy another house because Fannie Mae rules state I have to have 30% equity in the Concord house, 30% equity in the house I want to buy and 3 month’s reserves in the bank to cover both houses even though I have a renter in the Concord house with a 2 year lease. I have the reserves but don’t have the equity. The reserves would have been my down payment, but now I will have no down payment. On top of that an FHA Loan requires PMI no matter how much I put down. What’s going on here? I make over 100k a year and can’t buy even the cheapest house. The rules have effectively banned the average homebuyer from getting a second house no matter what the circumstances. Only the rich can now buy a second home. The financial institutions can screw us by making ridiculous loans that trash the country’s economy and then, after getting huge bail outs at our expense, they can refuse to make reasonable loans to responsible people. I’m disgusted.

This post was submitted by Linda Stone.

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Cathy Koon April 11, 2010 at 6:59 pm

Linda, We can certainly relate to your frustration. We have tried for four months to purchase a vacant home. Water has been standing in the basement destroying the furnace etc. and the house is full of mold. We received an estimate of $40,000 for mold remediation. After deducting the expected expenses we made what we felt was a fair offer. We were outraged and digusted to receive a counter offer demanding full price as well as refusing to pay the customary title insurance ususally paid by the seller. You are SO right. The greedy, unprofessional tactics of these companies brought them to the brink of destruction only to be bailed out by the taxpayers. We were good enough to bail them out in a time of need but not good enough to negotiate with on the sale of a home. Where do we go from here? I am so angry! They have not learned a thing. No, I’ll take that back. They have learned they can screw over the American people and get away with it!

Nick Weeks April 11, 2011 at 4:51 pm

Hi Linda,

I could probably help you in regards to obtaining a new loan for a new home. It sounds to me that the bank that you are working with was very conservative. Our reserve requirements and equity position are different then what you are speaking above in your post. Please call me when you have a chance. My number is 866-627-2541.