Cash Out Refinance My Share of Property?

Question

Hello my fellow BP'ers!

I have an interesting question that hopefully you guys (and girls) can help me out with. My question is: Is it possible to cash out refinance only my share in a property? Here's an example: A free and cleared duplex is owned by two siblings, Bob and Joe, and each own a certain portion of the property. Bob owns 60% and Joe owns 40% of the value of the duplex. Hypothetically, can Joe cash out refinance up to 80% of his 40%? Assuming the property is appraised at $450,000, can Joe refinance $144,000 (80%) of the $180,000 (40%)?

New BP Member,

Levon K.

Levon K. · Answer

Thank you for your post, I appreciate it. The duplex is actually an owner occupied property that has been free and cleared for over 10 years. I will look into the reference you've provided as this may shed some light on the topic. Also, is there an equivalent version for Canada, not the US.

Thanks again,

Levon

Chris Martin · Answer

Welcome to BP.

From your post, it sounds like this is a non-owner occupied property. So you would have multiple non-occupant borrowers. Section B2-2-04 of the Fannie Mae Selling Guide covers this. From what I can tell, the owners will sign the mortgage or deed of trust note and have joint liability for the note with the borrowers. There will be one first position lien, multiple borrowers, and one check to deal with regardless of the percentage of ownership.

Note that I am not a loan broker. You should verify with a licensed loan broker.

References: https://www.fanniemae.com/content/guide/sel022316.pdf