Fannie Mae is loosening a restriction to encourage lending to property investors, a group that has been widely blamed for contributing to the housing meltdown but is also seen by many as critical to a recovery.

The government-sponsored enterprise told lenders last week that starting next month it will buy or guarantee home loans made to borrowers that have mortgaged as many as nine other properties. Currently, Fannie will not touch a loan if the borrower has financed more than three other homes.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.