Looking For 10% Down And No MI on Refinance

[Cameron Kotara]

Hi BP, 

We secured our first STR with an equity line of credit and are now hoping to convert that into a 30-year fixed. Any advice on finding a lender who can do 10% down and no MI on a refinance?

We also are looking to purchase our next deal and would like to use a similar loan product if possible. Thanks for any help!

[Nick Belsky]

@Cameron Kotara

There are several private lenders who lend on 30yr fixed notes, some even go to 40 years!  A very common misconception.  They are actually very common.

Your challenge will be finding one that will give full value to an STR... be selective. There are plenty of lenders out there who will lend on STR but have no idea what they are doing. The ones who know, do them often and use AirDNA or T-12s to give you full rental value in the DSCR calculations. Your next big challenge will be getting 10% down. Rarely do I see STR get less than 20% down and even then, that was before all the market shifting in March 2022. I haven't seen better than 80LTV in a while.

If going conventional, you won't find better than 15% down and MI will be required.  If trying to slate it as a second home, you may be able to get it through at 10% but it has to meet certain requirements to be considered a second home...

What state are you shopping in?

Cheers!

Cheers!