Understanding of Fannie Mae Selling Guide is important for U.S. Housing finance, real estate investors, mortgage brokers, and lenders. As the housing market changes, we continually update our policies in line with our financial performance priorities, risk management goals, and regulatory developments.
Upon reviewing the notes it is clear that one of the biggest sections of importance in guide is regarding RESERVES for borrowers that are financing multiple properties. If you are financing multiple properties and/or investment properties your lender will refer to these rules to know how much cash or liquid assets you’ll need in order to qualify.
So in this guide, we’ll break down the newest 2025 updates, how reserve calculations work, and steps you can take to stay compliant while ensuring your business’ finances are secure.
What Is the Fannie Mae Selling Guide?
The Fannie Mae Selling Guide establishes requirements lenders must follow to sell loans to Fannie Mae. These include:
- Borrower eligibility
- Underwriting standards
- Property requirements
- Documentation rules
- Reserve and income calculation
The section on financial reserves is particularly relevant for investors with multiple financed properties. Reserves act as a financial buffer in the event rental income ceases or other bills emerge, helping to mitigate against loan default risk.
🔗 Access the official Fannie Mae Selling Guide here
What Are Reserve Requirements?
“Reserves” in mortgage lingo means liquid assets or money a borrower has after closing that’s readily available. These may include:
- Funds in checking or savings accounts
- Stocks, bonds, mutual funds
- Retirement plans (subject to some caps)
- Life insurance policies including cash value
In months of PITI (Principal, Interest, Taxes, and Insurance) these reserves are expressed. For example, if a $2,000 PITI property has 6 months reserves required by Fannie Mae, you need to have $12,000 in eligible assets.
Multiple Properties Fannie Mae Reserve Requirements for 2025
If you’re financing more than one property, you’ll have more stringent reserve requirements than a one-property buyer.
Here is a summary of today’s reserve requirements according to the Fannie Mae Selling Guide (2025 update):
🔢 Key Reserve Rules:
Primary Residence: normal reserve rules apply (2 months more common).
Second Homes & Investment Properties:
- 2 months reserves for each additional property being financed (in addition to subject property and primary residence).
- Total Number of Financed Properties: Tighter credit score and reserve requirements may apply if you have more than four financed properties.
- HomeReady Exemptions: If you’re using Fannie Mae’s HomeReady loan program, then you might qualify for reduced or waived reserve requirements in some instances.
🧮 Sample Calculation of Reserves:
Here is an example of 3 financed properties with monthly PITI of $1,500.
- Primary residence: 2 months reserves= $3,000
- $6,000 for 2 more properties for 2 months.
- Total reserves required = $9,000
Now let’s imagine we have a borrower with 5 financed properties paying $1,800 per month:
- 4 new properties (x 2 months) = $14,400
- Plus if needed reservations for the subject property
- Depending on the type of loan, total could reach more than $15,000.”
These calculations highlight the importance of liquidity planning, perhaps more so for real estate investors than anyone else.
🔗 Fannie Mae: Minimum Reserve Requirements (B3-4.1-01)
Announcement SEL-2025-01 2025 Update
On February 2025, Fannie Mae published Announcement SEL-2025-01 with updates to several Selling Guide sections. While the hefty reserve framework for multiple financed properties stays largely in place, some minor clarifications were made around asset type acceptable as reserves and how reserves should be documented.
Key points from SEL-2025-01:
- Clearer documentation requirements for large deposits in reserve accounts
- Digital asset accounts (such as crypto) are yet not taken into account as liquid for the calculation of reserves
- Greater consistency in aligning with DU (Desktop Underwriter) reserve calculations
🔗 Read Announcement SEL-2025-01
Selling Guide vs Multifamily Guide: What’s the Difference?
Fannie Mae has a couple of lenders Guides:
- Selling Guide: 1 to 4 units, including second homes and investment properties
- Multifamily Guide: For larger apartment and commercial buildings financed through Fannie Mae’s multifamily programs.
If you’re financing duplexes, triplexes or fourplexes, the Selling Guide still applies. Anything larger (5 or more units) would be covered under the Multifamily Guide.
Q: When will the Fannie Mae Selling Guide changes go into effect?
❓ When would the Fannie Mae Selling Guide be used?
It’s the 1,130-page official handbook for lenders selling mortgages to Fannie Mae. It contains rules on income verification, credit, assets, and even reserve requirements.
❓ What are “multiple financed properties”?
Any and all of your property with a mortgage your personal residence, your beach house, your rental units counts toward your total. Fannie Mae starts adding additional reserve requirements at your first two financed properties.
❓ Do I need reserves for every property?
Yes. The guide typically calls for 2 months of reserves per financed property, which does not include your primary residence unless that residence is the subject of the loan.
❓ What if I want to use retirement accounts to satisfy reserve requirements?
Yes, but only part may be counted and the funds must be available without penalties or hardship.
❓ How do reserve requirements influence my approval?
Some loan types require reserves less money here can result in more expensive loans. Lenders and underwriters favor investors with strong liquidity.
Preparation For Reserve Requirements: Pro Tips
1. Separate the Money for You and the Property
You can track reserves per property by using individual accounts.
2. Add Liquidity Before you Apply
When setting up a new loan, transfer funds from illiquid investments to liquid accounts.
3. Consult with a local mortgage broker
A mortgage professional who knows the Fannie Mae seller guide can explain today’s reserve rules and loan options.
4. Utilize Fannie’s Desktop Underwriter Tool
DU offers automated underwriting recommendations and reserve assessments.
Final Thoughts
With real estate investment surging in America, lenders are paying more attention to whether borrowers can afford to juggle several properties. In that effort, the Fannie Mae Selling Guide reserve requirements have a significant role acting as a protection for lenders and as a measure of readiness for investors.
So if you’re looking to grow your portfolio, rather than haphazardly or accidentally planning for reserves, it should be a key aspect of your plan.
For more insights into mortgage guidelines and financial strategies, visit FinanceDeep.com.
