Fannie Mae policy change helps investors buy condos

Fannie Mae changed its policy for investors appling for condo financing. Investors will no longer have to deal with its former rule whereby vacant, bank foreclosed and REO units were counted as non-owner occupied.

That's an important distinction for investors who can't qualify for properties with less than 51% owner occupied residences. The idea is that there's a greater risk of default in projects that have high numbers of investor units, with absentee owners renting out their units.

Under the revised policy -- which was requested by the National Association of Realtors in November -- Fannie says it will now count bank-owned REO units that are listed for sale, but are not rented, as if they are owner-occupied when computing the 51 percent ratio.