noone will do a cash out refi on rental house?

noone will do a cash out refi on rental house?

Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes

want to do a cash out refi on a home i purchased 1 year ago and put that money into a new purchase.

contacted 5-6 different banks/lending institutions and noone can do it.

they tell me:

"just got off the phone with Fannie Mae. They have made changes to their Multiple Properties program. They no longer allow cash out. On conventional loans, lenders have a 4 financed property maximum. It has always been applied only to a purchase, which is where Flagstar came in with their special program. But now lenders will not allow refinances of a rental property if it’s one of 4 or more already owned. Refinancing a primary residence is never an issue regardless of how many properties you own."

anyone know a way around this?

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Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
13y

I wrote this a while back for how to track down banks that might make this sort of loan:
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Start with :
http://www2.fdic.gov/IDASP/

Click on "Find Institutions" down the page a little ways:
http://www2.fdic.gov/IDASP/main.asp

On this page you can specify criteria. I'll put in Colorado for the state and leave "Sort by" set to "Total Assets". I want to look for smaller banks. Click "Find"

That gets me a list of banks, largest to smallest. The first column I see is "Cert" and has a number. Those are clickable links, so click one.

Now I see a screen that has a blue band across the middle with "Information Gateway". Below that is "ID Report Selections:". I choose Assets and Liabilities - % Assets. This will show me percentages. Choose "Assets and Liabilities" to see actual numbers. Now click "Generate Report" over to the right.

This generates a balance sheet for the bank. Item 6 (number may vary, I saw 6 on the couple I checked) is "Net loans & leases". That's a clickable link. Click it.

This generates a listing of the bank's loan and lease assets. A bank considers a loan to be an asset. This will break out the types of loans the bank has made. Look for a bank that is making the type of loans you want. You should see two columns of numbers. I see Dec 2012 and Dec 2011. If the number is increasing for the type of loan you want, all the better.

Sorry, I know it would be easier to search for "show me banks in my area that are making investor real estate loans", but its not that simple. Back on the very first search screen, there is an criteria called "Asset Concentration Hierarchy" and one of the choices is Mortgage Lending Specialization. You might try that to narrow down the choices.

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  • Engineer · Suwanee, GA · Member since 2013 · 127 posts · 47 votes
    11y
    Originally posted by @George P.:

    lots of banks are doing it now a days.. try "the mortgage center"  in Southfield.  they did ours.  also try "independent bank". . if not let me know and I will get u more names. 

     Thank you so much for posting this topic and the info on local banks here is Southeast MI. Myself, is also having the difficulty of finding a local bank that can cash out refi on my investment properties

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