BiggerPockets

Has anyone ever done this? This would be my goal.... Purchase a homepath eligible property as an OO that I think is undervalued through Fannie's Homepath mortgage program (3% down payment).

Then, hopefully, refinance the property with cash out; leveraging any confirmed equity that is available to pay off a couple of student loans that I still have.

I understand that there is a great deal of further discussion pertaining to the analysis of the deal, but, just wondering if anyone has ever done this? I notice most homepath properties have a 3 month deed restriction....

Yup! I just ran into this with a rental property. Bought it(REO), rehabbed it, then thought I would be able to refi it and pull money out. Turns out there is a seasoning requirement of a year before I can pull any money out of it on a refi. The most they would loan on it is 75% of the purchase price plus any upgrades I've added. So, in my case, I bought it for 65k, rehabbed it for 16k for a total of 81k. I could refi it provided the loan was for no more than 61k.

One possiblility, though I haven't looked into it, is if it appraises for substantially more than you paid is to get a HELOC on it and pull some of the equity out of it that way.

thanks for all the information.... sounds like there is no way around the seasoning requirement then?

I know that LTV is typically established by either the purchase price or appraisal (whichever is lower). Something just seems flawed about this to me.... If I purchased a place for 5k that appraised for 100k, most people would consider that the property has a REAL market value of more than the purchase price. (extreme example I know, but the same principle).