Refinancing with a non fannie mae lender near chicago

17 Replies

I recently bought two SFR's in the joliet illinois area. Now that the rehab is almost done, I am looking into getting a loan on the properties to obtain cash for a new investment. The few traditional lenders I have spoken to require me to be on title for 12 months or will only lend the value of the original purchase price, not the ARV. I really don't want to wait until October to pull cash out of the homes. Neither house has a mortgage currently. Any tips or contacts on lenders that are more flexible?

I am just finishing my first cash out refi with loan depot. I am not done yet, but they are using a six month seasoning period. PM me if you want my loan officers info!

It's tough accessing cash so quickly. I know of a couple options at 6 months. Let me know if you want those. The other options with very little seasoning but higher interest that I have found: Lima one capital, Visio financial and there is one more that is escaping me.

I refi my properties with Quicken Loans.
I never pull max cash out just so I'm still cash flowing and so I'm not over leverage . I do 60 of ARV. Perfect for me . Just my thought .

Freddie Mac and Fannie Mae both offer cash out refinancing without any seasoning so long as the amount financed does not exceed the original purchase price plus closing costs. This works well for small and modest rehabs. Maximum LTV is going to limit you at 70% anyway. So for example, let's say your purchase a property for $70k, do a $15-20k rehab, and the property now appraises for $100k, you should be able to get a loan for $70k. Hometown National Bank in Joliet has done this for me. It is referred to as delayed financing.

Originally posted by @Nathan Waters :

Any tips or contacts on lenders that are more flexible?

 Send me a PM.  I have some ideas for you.  We're in communication w/ one lender but the property can't be in Cook County.  There may be some others.

@Nathan Waters how do you own the properties? Are they titled in your own personal name or in the name of a trust? LLC? etc?

@John Warren - with Loan Depot, I ask the same question, are they refinancing a home in the name of an entity or your personal name?

I have a couple that do 1 year seasoning in order to use the ARV and not purchase price that will also do the loan in the name of the LLC. However, 1 only will do a max of 3 properties and then they won't lend anymore, so I am always after new potential lenders.

@Keishee Hill they want to see 6 months seasoned . I also feel very confident that I can get a private 5-6% 30yr amortize 5 year
Balloon . If you approach a private lender. Retired . Who would not want to have a monthly check with a 1st lean . That's what I'm looking at.

I have worked with two banks with different products:

1.  First Federal Savings Bank Ottawa Il - 30 year with 5 year balloon rate or 15 year fixed

2. First American Bank - 30 year fixed.  I'm not sure on the seasoning. We are working on a refi for a property we have owned sense April 2015.

Originally posted by @Dale Stevens :

@Nathan Waters how do you own the properties? Are they titled in your own personal name or in the name of a trust? LLC? etc?

@John Warren - with Loan Depot, I ask the same question, are they refinancing a home in the name of an entity or your personal name?

I have a couple that do 1 year seasoning in order to use the ARV and not purchase price that will also do the loan in the name of the LLC. However, 1 only will do a max of 3 properties and then they won't lend anymore, so I am always after new potential lenders.

I am taking the properties in my own name @Dale Stevens

I am going to quitclaim after the refi goes through. I had not heard of any banks doing refinances on residential properties for LLC's!

@David O. ,

Any contacts would be greatly appreciated. Thanks for the response. You're not the only one to mention Visio. I'm going to check them out as well. It will be 6 months in March so thats within my window.

@Dale Stevens

I own all of my homes in my own name. I haven't bothered with LLC's at this point. I'm thinking about going that route once I have these 2 houses refinanced.

@Rick H.

Unfortunately i paid next to nothing for these homes. 22K each. The rehab costs are more than the purchase price on one of them. So to realize the full potential of equity, I will need a more flexible lender.

Thanks to everyone for the responses. I really appreciate all of the feedback. I wasn't expecting this much response. Good luck to everyone. Happy Investing.

@John Warren @Nathan Waters @Mateo Carrera @David O. @Rick H. for 90% of the PP + 100% of the rehab, and once that work is done, boom you can do a rate/term refi at the new value and get into a conventional loan. You are less than 10% out of pocket on the whole project. This is a great strategy with a very small investment and your money is not tied up, great way to do many projects and keep chugging along. Great for BRRR.

Now, cash out for Conventional financing requires 6 months seasoning, UNLESS you meet the Delayed Financing exception (see below).  Anything over 6 months seasoning is an overlay by that lender.

Delayed Financing - this is HUGE and many lenders don't do it, and/or the loan officer doesn't even know about it. You can only do this if you do not currently have a lien on the property, i.e. if you paid cash, or got an unsecured loan, etc. You can then cash out with NO seasoning, based on the new appraised value, up to the max LTV (owner occ 80% 1-unit, 75% for 2-4 unit, and investment property 75% for 1-unit, 70% for 2-4 unit), not to exceed your initial investment, plus closing costs and prepaids. This is Conventional financing, no special rate or anything funky.

With Delayed Financing you also could have bought the property with a LLC. And you have to source where your original investment came from. If it was a loan, you are required to pay it back with the proceeds of the refi.

Always make sure you partner with an experienced loan officer that knows how to navigate the guidelines.  One slip up and you could get stuck.

And as a follow up that I should have mentioned, that 6 months seasoning for the cash out (if not Delayed Financing) is based on the disbursement (funding) date, not application.  So you can start the application after around 4 months and close 60 days later, as soon as you hit 6 months.

@Zack Karp   Thanks for the shout out!!!  This is great information for investors looking to refinance as the seasoning question is one of the biggest hurdles investors face.  I do have a few options for non-banking mortgages around refinancing without hitting the 6 or 12 month requirement.

Keep me in mind if you have any borrowers looking for investment financing as I would be more than happy to help.  Also, lets chat regarding a possible referral pipeline as I am always looking for residential mortgage servicers to move my investment clients to when they want that banking structure.