Refinancing Out of 203k

3 Replies

I am currently in the market for a 4-unit building for which I would like to utilize an FHA 203k loan to pump equity into my property while I can lease out three of the units and live in the fourth.

I am excited about the ability to build value into my property but I am not thrilled about the additional mortgage insurance (PMI) payments.

My question is - so long that I satisfy the LTV and underwriting criteria of my lender, how soon after repairs are completed on my FHA property could I refinance into a conventional (or other) loan product? I am not wanting a cash out refinance. Only want to get away from the PMI and other red tape that FHA entails.

What other speed bumps may I run into?

@Evan Manship  

If you work with a direct fannie/freddie lender you could refi the loan as soon as the work is done and the value is increased. One hang up you may or may not have is the rental income. Depending on your DTI you may need to get through taxes with reporting the rental income. The mortgage person that originates the loan may need you to make 4-6 payments on the loan so that they do not get dinged for it paying off right away, you can just ask them.

Hey @Evan Manship I'm currently in the same situation. I recently bought a multifamily using an FHA insured loan and I'm looking to refi into a conventional loan. I would like to know how this turned out for you? and if you have any added advice?

Thank you

@Evan Manship Better late than never, (over two years) but Im curious how this scenario played out with you.  Were you able to refi out of the 203k easily?  Just curious, thanks!

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