Rate and Term on Bridge Loan

[Max Lefkowitz]

Hi Everyone,

I’m a newbie here, so please forgive me if I’m in the wrong place.

I’m about to buy a 3 unit property in NYC. My plan was to buy it with a Bridge Loan, do some extensive renovation and refinance using Rate and Term.

I spoke to a loan officer yesterday, he said that it doesn’t work anymore and the bank will not use the new value, instead they will still use the purchase price as the value.

It doesn’t make sense to me. Maybe it’s this banks own overlay?

Any help would be appreciated!

[Robin Simon]

Quote from @Max Lefkowitz:

Hi Everyone,

I’m a newbie here, so please forgive me if I’m in the wrong place.

I’m about to buy a 3 unit property in NYC. My plan was to buy it with a Bridge Loan, do some extensive renovation and refinance using Rate and Term.

I spoke to a loan officer yesterday, he said that it doesn’t work anymore and the bank will not use the new value, instead they will still use the purchase price as the value.

It doesn’t make sense to me. Maybe it’s this banks own overlay?

Any help would be appreciated!

There are a lot of lenders out there for the refinance, not just a local bank or conventional agency-based (Fannie/Freddie) options. I'd advise to definitely shop around - there are lenders called "DSCR" lenders that can do these refinances based on the ARV (After-Repaired Value) in 6 months or sometimes as little as 3 months as @David Bilandzija mentioned.  I'd advise looking there as Fannie/Freddie just upped the seasoning period to 12 months so this strategy is probably unworkable for the time being using conventional financing but DSCR lenders should be able to well step into the void