7 ms·

The current limit is 10 houses per owner... there's absolutely no reason the gov should be subsidizing real estate investors like that. This should really just

The current limit is 10 houses per owner... there's absolutely no reason the gov should be subsidizing real estate investors like that. This should really just be limited to 1 (or maybe 2) houses per owner at one time. That would create a subsidy for people to own their house (middle class rent control), allow people to move from one to another, and stop wasting tax money on subsidizing investors.

mrep 4y ago
What are the interest rates for primary vs 2+ homes cause I bought a second home back in March and as I recall, a Fannie Mae/Freddie Mac change made in February had second properties be a 1.25% higher interest rate than a primary for 30 year fixed.
- pc86 4y ago
  FM/FM charge additional fees (up-front) for additional properties, but there is no "higher interest rate" for subsequent mortgages. You qualify for whatever you qualify for. Now if you're buying it as an investment property, depending on your down payment, that may increase your interest rate.
  - mrep 4y ago
    I think the effect is the same: https://www.nahb.org/blog/2022/01/fhfa-to-impose-hefty-upfront-fees-on-second-home-purchases/#:~:text=Also%20effective%20on%20April%201,loan%2Dto%2Dvalue%20ratio https://www.nahb.org/blog/2022/01/fhfa-to-impose-hefty-upfro....
themitigating 4y ago
Why even 2?
- xwdv 4y ago
  It’s not uncommon to have a winter and summer home.
  - nameless912 4y ago
    ...I would say it's _quite_ uncommon to have a winter and summer home.
  - ncallaway 4y ago
    While it may not be uncommon, I would say it shouldn’t be subsidized (at least until there homeless population is 0). The government should not be subsidizing anyone going for a second slice of cake, when there are lots of people who haven’t had a first slice.
    - JumpCrisscross 4y ago
      > it shouldn’t be subsidized (at least until there homeless population is 0) Mortgage subsidies don't meaningfully affect homelessness. Someone putting down a deposit with a developer for a fifth property to rent actually expands housing supply. That tweaks only rent-versus-own ratios. What does skew home supply is vacancy. Whether due to offshore holders treating New York apartment as poker chips, seasonal vacationers, delusional landlords asking above market, or NIMBYs blocking development, vacancy decreases housing supply and thus increases housing costs for renters and owners alike.
      - ncallaway 4y ago
        I think that's fair, and I was probably a little narrowly focused on summer/winter housing (which, I would assume would contribute to vacancy, unless used as short term rentals).
      - quxbar 4y ago
        that's like saying the cause of death is lack of oxygen to the brain - technically true, but hardly insightful.
- kbob 4y ago
  Buy the new one before selling the old one.
  - avmich 4y ago
    Or (like everybody else without the first owned house) sell the house, rent while buying another, then move from rented to owned house. A friend even had to spend a few weeks in a hotel (of a kind) with the family, while waiting for the house.
    - pc86 4y ago
      This isn't always possible.
      - boruto 4y ago
        especially if you have kids.
        ashwagary 4y ago
        There are apartments big enough to hold kids. I dont buy this argument.
        themitigating 4y ago
        Well too fucking bad. You don't get government handouts to make it easier for you to relocate to your 2nd home.
- Frost1x 4y ago
  As others commented, to give regular people some degree of mobility. Sometimes you need to buy before you sell to move and grab a job opportunity or get out of a place you're miserable in, so you'd need to have two mortgages at once for hopefully a short time. I'm personally not a fan of such a situation but it's a reasonable one in today's world.
  - JumpCrisscross 4y ago
    > you need to buy before you sell to move and grab a job opportunity or get out of a place you're miserable in, so you'd need to have two mortgages at once for hopefully a short time The FHFA assesses up-front fees on second homes [1]. One could simply delay this assessment, for a fee, and not assess it if e.g. a year down the line the borrower only has one mortgage. (That said, it seems simpler to reduce the threshold to two from ten.) [1] https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Targeted-Increases-to-Enterprise-Pricing-Framework.aspx#:~:text=For%20second%20home%20loans%2C%20upfront,loan%2Dto%2Dvalue%20ratio.&text=%E2%80%8BThe%20Federal%20Housing%20Finance,11%20Federal%20Home%20Loan%20Banks https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announce...
  - brooksbp 4y ago
    > I'm personally not a fan of such a situation but it's a reasonable one in today's world. Not a fan even in today's world. Example: The house next to mine sold for $300k 2y ago. Those owners put about $50k into renovations and sold 1y later for $450k. The current owner did nothing (didn't even mow the lawn!) and 6m later decided to pack up and move across country for a job. He put the house on the market for $650k. It's beyond insulting. That house is going to sit on the market for a long time unless he is willing to make no money or even lose money on the overall transaction.
    - smugma 4y ago
      Isn't the current owner losing $20-30K/yr in mortgage+property taxes?
      - naveen99 4y ago
JumpCrisscross 4y ago
There is a higher fee for second homes [1], though I can't tell if that scales beyond two. Nevertheless, totally agree, there shouldn't be subsidies for multiple homeowners. Do you have a source? Does this mean one could get up to $10mm in housing guarantees? Or does it mean you can buy ten $100k properties with conforming mortgages? [1] https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Targeted-Increases-to-Enterprise-Pricing-Framework.aspx#:~:text=For%20second%20home%20loans%2C%20upfront,loan%2Dto%2Dvalue%20ratio.&text=%E2%80%8BThe%20Federal%20Housing%20Finance,11%20Federal%20Home%20Loan%20Banks https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announce...
- eof 4y ago
  It means you can have 10mm in guarantees. Your debt to income has to continue to conform as the mortgages stack up. But, if you can use a lease against the house as proof of income that could offset the mortgage. That’s basically the secret sauce to “get rich with real estate” content. Edit: it has no effect on savvy individuals because they can always put each new home inside an llc, continually keeping their count low. This is what you would do after 10 mortgages today, though most people would have put the homes in llcs by 10 anyway for other reasons.
  - pc86 4y ago
    Isn't allowing LLCs to own single-family homes a big part of the problem? I have no problems with an LLC or other Corp owning apartment complexes, and I probably don't really have a problem with there being some sort of government subsidies for that - we need them, so they should probably be incentivized. There's zero reason for an LLC for own a SFH other than as some sort of tax scheme like you mention. Require that any mortgage on a SFH or owner-occupied multiplex be held by an individual. If you want an LLC to own a SFH/OOM, buy it in cash.
    - tanseydavid 4y ago
      LLC + SFH + AirBNB = "the great search for yield"
    - 4y ago
eof 4y ago
I think this is a case of the path to hell being paved with good intentions. Limiting it to 1 or 2 would have zero impact on either corporate money or savvy individuals and, would likely reduce upward mobility, as navigation of these subsidized markets is one of the most reliable paths to go from low to medium net worth. Once someone has 8 figure net worth, these subsidies are noise. I really get the feeling the baddies are using much more egregious subsidies than this one.
- pc86 4y ago
  I don't think upward mobility would be meaningfully impacted by removing government subsidies of 6th, 7th, etc. homes.
  - eof 4y ago
    No the 6th and 7th would have no effect at all. The 2nd and third likely would though.
senectus1 4y ago
how absurd that Tax Payers are subsidizing 1%ers that are buying 10 investment properties.

mrep 4y ago

What are the interest rates for primary vs 2+ homes cause I bought a second home back in March and as I recall, a Fannie Mae/Freddie Mac change made in February had second properties be a 1.25% higher interest rate than a primary for 30 year fixed.

pc86 4y ago
FM/FM charge additional fees (up-front) for additional properties, but there is no "higher interest rate" for subsequent mortgages. You qualify for whatever you qualify for. Now if you're buying it as an investment property, depending on your down payment, that may increase your interest rate.
- mrep 4y ago
  I think the effect is the same: https://www.nahb.org/blog/2022/01/fhfa-to-impose-hefty-upfront-fees-on-second-home-purchases/#:~:text=Also%20effective%20on%20April%201,loan%2Dto%2Dvalue%20ratio https://www.nahb.org/blog/2022/01/fhfa-to-impose-hefty-upfro....

themitigating 4y ago

Why even 2?

xwdv 4y ago
It’s not uncommon to have a winter and summer home.
- nameless912 4y ago
  ...I would say it's _quite_ uncommon to have a winter and summer home.
- ncallaway 4y ago
  While it may not be uncommon, I would say it shouldn’t be subsidized (at least until there homeless population is 0). The government should not be subsidizing anyone going for a second slice of cake, when there are lots of people who haven’t had a first slice.
  - JumpCrisscross 4y ago
    > it shouldn’t be subsidized (at least until there homeless population is 0) Mortgage subsidies don't meaningfully affect homelessness. Someone putting down a deposit with a developer for a fifth property to rent actually expands housing supply. That tweaks only rent-versus-own ratios. What does skew home supply is vacancy. Whether due to offshore holders treating New York apartment as poker chips, seasonal vacationers, delusional landlords asking above market, or NIMBYs blocking development, vacancy decreases housing supply and thus increases housing costs for renters and owners alike.
    - ncallaway 4y ago
      I think that's fair, and I was probably a little narrowly focused on summer/winter housing (which, I would assume would contribute to vacancy, unless used as short term rentals).
    - quxbar 4y ago
      that's like saying the cause of death is lack of oxygen to the brain - technically true, but hardly insightful.
kbob 4y ago
Buy the new one before selling the old one.
- avmich 4y ago
  Or (like everybody else without the first owned house) sell the house, rent while buying another, then move from rented to owned house. A friend even had to spend a few weeks in a hotel (of a kind) with the family, while waiting for the house.
  - pc86 4y ago
    This isn't always possible.
    - boruto 4y ago
      especially if you have kids.
      - ashwagary 4y ago
        There are apartments big enough to hold kids. I dont buy this argument.
      - themitigating 4y ago
        Well too fucking bad. You don't get government handouts to make it easier for you to relocate to your 2nd home.
Frost1x 4y ago
As others commented, to give regular people some degree of mobility. Sometimes you need to buy before you sell to move and grab a job opportunity or get out of a place you're miserable in, so you'd need to have two mortgages at once for hopefully a short time. I'm personally not a fan of such a situation but it's a reasonable one in today's world.
- JumpCrisscross 4y ago
  > you need to buy before you sell to move and grab a job opportunity or get out of a place you're miserable in, so you'd need to have two mortgages at once for hopefully a short time The FHFA assesses up-front fees on second homes [1]. One could simply delay this assessment, for a fee, and not assess it if e.g. a year down the line the borrower only has one mortgage. (That said, it seems simpler to reduce the threshold to two from ten.) [1] https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Targeted-Increases-to-Enterprise-Pricing-Framework.aspx#:~:text=For%20second%20home%20loans%2C%20upfront,loan%2Dto%2Dvalue%20ratio.&text=%E2%80%8BThe%20Federal%20Housing%20Finance,11%20Federal%20Home%20Loan%20Banks https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announce...
- brooksbp 4y ago
  > I'm personally not a fan of such a situation but it's a reasonable one in today's world. Not a fan even in today's world. Example: The house next to mine sold for $300k 2y ago. Those owners put about $50k into renovations and sold 1y later for $450k. The current owner did nothing (didn't even mow the lawn!) and 6m later decided to pack up and move across country for a job. He put the house on the market for $650k. It's beyond insulting. That house is going to sit on the market for a long time unless he is willing to make no money or even lose money on the overall transaction.
  - smugma 4y ago
    Isn't the current owner losing $20-30K/yr in mortgage+property taxes?
    - naveen99 4y ago

JumpCrisscross 4y ago

There is a higher fee for second homes [1], though I can't tell if that scales beyond two. Nevertheless, totally agree, there shouldn't be subsidies for multiple homeowners. Do you have a source? Does this mean one could get up to $10mm in housing guarantees? Or does it mean you can buy ten $100k properties with conforming mortgages? [1] https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Targeted-Increases-to-Enterprise-Pricing-Framework.aspx#:~:text=For%20second%20home%20loans%2C%20upfront,loan%2Dto%2Dvalue%20ratio.&text=%E2%80%8BThe%20Federal%20Housing%20Finance,11%20Federal%20Home%20Loan%20Banks https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announce...

eof 4y ago
It means you can have 10mm in guarantees. Your debt to income has to continue to conform as the mortgages stack up. But, if you can use a lease against the house as proof of income that could offset the mortgage. That’s basically the secret sauce to “get rich with real estate” content. Edit: it has no effect on savvy individuals because they can always put each new home inside an llc, continually keeping their count low. This is what you would do after 10 mortgages today, though most people would have put the homes in llcs by 10 anyway for other reasons.
- pc86 4y ago
  Isn't allowing LLCs to own single-family homes a big part of the problem? I have no problems with an LLC or other Corp owning apartment complexes, and I probably don't really have a problem with there being some sort of government subsidies for that - we need them, so they should probably be incentivized. There's zero reason for an LLC for own a SFH other than as some sort of tax scheme like you mention. Require that any mortgage on a SFH or owner-occupied multiplex be held by an individual. If you want an LLC to own a SFH/OOM, buy it in cash.
  - tanseydavid 4y ago
    LLC + SFH + AirBNB = "the great search for yield"
  - 4y ago

eof 4y ago

I think this is a case of the path to hell being paved with good intentions. Limiting it to 1 or 2 would have zero impact on either corporate money or savvy individuals and, would likely reduce upward mobility, as navigation of these subsidized markets is one of the most reliable paths to go from low to medium net worth. Once someone has 8 figure net worth, these subsidies are noise. I really get the feeling the baddies are using much more egregious subsidies than this one.

pc86 4y ago
I don't think upward mobility would be meaningfully impacted by removing government subsidies of 6th, 7th, etc. homes.
- eof 4y ago
  No the 6th and 7th would have no effect at all. The 2nd and third likely would though.

senectus1 4y ago

how absurd that Tax Payers are subsidizing 1%ers that are buying 10 investment properties.