Fannie Mae Caps Second Home Mortgages At 7 Percent – NMP
Regulation and Compliance

Fannie Mae Caps Second Home Mortgages At 7 Percent

Mar 11, 2021
Fannie Mae logo
A headshot of Navi Persaud
Director of Events

Fannie Mae's Lender Letter revealed that the company will be imposing a 7% limit on its acquisition of single-family mortgage loans secured by second home and investment properties.

The company made edits to its eligibility policies stating that all second home and investment properties must be written with the Desktop Underwriter, receive an Approve/Eligible recommendation and be delivered as a DU loan in Loan Delivery, according to the letter.

The only exception that will be permitted for second home and investment properties loans is for high LTV refinance loans that are manually underwritten in accordance with the Alternative Qualification Path and delivered with Special Feature Code 840.

"This new limitation will likely open a path to a greater number of Non-QM and private label opportunities," said Rob Chrisman in his latest report.

These policies are effective for whole loans submitted to our Loan Delivery system on or after Apr. 1, 2021, and for loans delivered into MBS pools with issue dates on or after Apr. 1, 2021, according to Fannie's Lender Letter. After this date Loan Delivery will apply a “Fatal” error for loans that do not meet the above requirements.

Click here to learn more about the second home and investment properties cap.

 

About the author
A headshot of Navi Persaud
Director of Events
Navi Persaud is Director of Events at NMP.
Link copied
Published
Mar 11, 2021
Get the NMP Daily
Operations
From Originator To Owner: 7 Rules For Building A Brokerage

NMP Ignite's Build-A-Broker Summit tackled the decisions that determine whether a new brokerage becomes a scalable company or a more demanding job

Getting licensed may open the doors to a mortgage brokerage. It does not guarantee that the business will be profitable, scalable, or capable of operating without its founder.That distinction was at the center of NMP Ignite’s Build-A-Broker Summit, held Sept. 1 and sponsored...

Continue reading
Non-QM
Truss Adds Direct Lending Without Abandoning Wholesale

The Non-QM specialist will underwrite and fund California loans in-house while retaining access to more than 90 wholesale lenders across its broader footprint

Truss Financial Group is adding direct lending capabilities in California, giving the Non-QM specialist greater control over underwriting and funding while preserving the wholesale model on which it built its business.The Ladera Ranch, California-based company said it can no...

Continue reading
Renew your NMLS License — for free.

Enjoy access to a free NMLS renewal class when you attend an in-person event.

Find an event
More from
Regulation and Compliance
Closing Costs: What HUD’s Proposed Rule Will Really Do To The Market

HUD’s proposed rollback of housing protections could deepen barriers for underserved borrowers, shrink the pool of prospective homebuyers, and ultimately cost loan originators business

Opinion
Aug 27, 2026
MISMO Gives Lenders A New Test For Mortgage AI Vendors

Two certifications move the industry’s FRAME initiative from governance guidance toward product-level validation and implementation

Tech
Aug 27, 2026
One Owner, Two GSEs: Would Fannie And Freddie Still Compete?

Oksenholt Capital says shared infrastructure could lower costs without weakening competition, but mortgage bankers have warned that common ownership could reduce lender choice, innovation, and market resilience

Analysis and Data
Aug 27, 2026
MaxClass: Education Meets Lead Generation

CEO Kelly Hendricks details how MaxClass and HomeQB are opening a new referral channel for originators

Regulation and Compliance
Aug 20, 2026
Fannie Mae Returns To Distressed-Loan Market With $214 Million Sale

The agency’s first nonperforming-loan offering in 13 months transfers 969 deeply delinquent mortgages to private buyers, including a small pool concentrated in Dallas-Fort Worth

Analysis and Data
Aug 20, 2026
Brief Refinance Shift Tests Mortgage Lenders’ Compliance Controls

Critical defect rate jumps 23.9% as math-based compliance findings expose the potential for one systemic error to affect loans across a lender’s book

Regulation and Compliance
Aug 20, 2026