I've worked with a couple different lenders in the past and found that combination of multi-family and cash-out tends to be tricky. Some lenders don't do it at all, others require lower LTV for multi-family (even as primary residence). My most-recent lender was great initially when I started working with them several years ago, but seems to have gotten worse. With the most recent refinance, their underwriter took 4.5 months to approve the loan. There was one minor sticking point which contributed to the delay (but was not the main reason for it): I applied for COVID-relief forbearance with one of the properties to de-risk my ability to pay mortgage when a couple tenants weren't able to make payments. All of the forbearance has been repaid and the loan is once again current. However, the refinance itself ultimately fell through due a house fire that happened 1 day prior to approval.
To make long story short, while working with insurance to rebuild my primary residence, I moved back into my earlier-purchased triplex (I owned 2 triplexes in the city prior to the fire). There is about $200-300k equity in it I would like to pull out, and since this place is now my new primary residence for at least the next 2+ years, I want to cash-out refinance it at 80% LTV. Based on my situation, here are potential issues I would like to avoid:
1. slow underwriter that will take several months to process a refinance (like my most recent lender)
2. banks that don't do 80% LTV on multi-family, even as primary residence
3. underwriter who may refuse to approve post-forbearance, even if completely repaid (I heard that some banks attach negative connotation to forbearance, regardless if it's COVID-related or not, regardless if it's been repaid or not)
Other than the issues mentioned above, I don't foresee any other problems. I have a stable W-2 that's enough to qualify me for the refinance by itself, as well as rental income, and over a year of cash reserves. Can someone recommend a lender?
How are you finding these lenders? Are you using a broker or going direct? In my experiences with small multifamily and small commercial multifamily; the best lenders are the ones I source myself. Put together a list of all local banks and credit unions within an hour drive of the property and see what they have to offer. You can reach out to them by phone and email.
The guidelines for conventional financing are very clear regarding loan to values. The max ltv for cash out of a 3 unit is 75%. There are other lenders out there that are higher, but they are not conforming loans and the rates/fees will be higher.
The guidelines for those folks that sought relief for Covid related delinquencies are also very clear. They allow a new mortgage if you just pay the back payments or require 3 months of payments to be made past the Covid relief if the situation was remedied by loss mitigation.
If you're not getting decent service past those parameters above, I'd search for a new lender.