Posted almost 4 years ago

All About Conventional Cashing Out, On Those Properties 1-10!

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      Recent changes to CASH OUT Financing;

      - Conforming limits increased across the board everywhere! Here is a link to see the max for your area!

      Look Up Conforming Limits For Your Area!

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      BRRR / BRRRR....... Buy Rent Rehab Refinance..........& Repeat


      A cash out refinance is a refinance of your property that allows you to pull equity out of a property. The mortgage can either be paid off free and clear or can have a low enough balance on the current mortgage versus the value, to make it worth pulling out the equity in the property. Cash out refinances are available on primary, second homes and investment properties.

      • The typical cash out financing is done after 6 months of owning the property, based on ARV and available for mortgaged properties #1-10. Please see delayed financing for less than 6 months after closing.
      • On a primary residence you can pull out up to 80% LTV on a SFR and up to 75% LTV on 2-4 unit multi-families.
      • On an investment property; A SFR if you have #1-10 mortgaged properties, you can pull out up to 75% of the equity and on 2-4 units is up to 70% equity.
      • On an investment property; If you have #7-10 mortgaged properties, including subject you are required to have a credit score of 720, and are subject to a minimum loan amount of $50k!
      • PROPERTIES LISTED FOR SALE - Must be taken off of the market prior to disbursement date of the new mortgage.

      Cash Reserves Required For Other Properties Owned by Investor, if doing a cash out on investment property;

      Cash Reserve Requirements;

      6 months Freddie Mac's Guide to Refinancing, including Cash Out.

      Fannie Mae's Guideline to Cash Out Financing.

    Fannie Mae Guideline for Cash Out, Mortgaged Property 5-10.


    Alabama, Alaska, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming

      This information is accurate as of the time of posting. Please also verify the accuracy of this information at the time you are considering these options as guidelines change. 

Comments (3)

  1. What if you use a 1031 exchange to pay the entire house. Can you immediately do a cash out refi?

  2. Jerry,

    Great information, but I don't understand it all.  Bear with me, I'm new to the industry.

    I got it that, with mortgages #1-4, I can pull out 75% of ARV after six months.  After that it gets a bit hazy.

    Can I pull out 75% ARV prior to 6 months for mortgages 1-4?

    Please further explain "delayed financing."  Is it only available if I payed cash for the property, and then only for purchase and closing costs?  I lose my rehab costs?

    I have more questions, but these are good for now.



    1. To cash out prior to 6 months you would of had to purchase the property all cash. Correct, in that prior to 6 months you can not consider the rehab costs..... Only closing costs and purchase price. The house still gets an appraisal and you can pull out up to 75% LTV but only up to the max allowed of these costs.