Refi CO with subject to deal

1 Reply

Hi,

Out of curiosity, has any one had this situation before?

Borrower purchased a SFH 2 months ago as investment property, took the project subject to a 1st loan of $100K and a HELOC of $100K and the rest in cash of $500K. Did a rehab of $50K. Property is now appraised at $1M. Borrower would like to do a refi CO now to pay off the existing 1st and 2nd and pull out some cash (as much as possible). Delayed financing doesn't work because the subject property has two liens on it. Any other ideas how to structure this refi CO now instead of waiting another 10 or 4 months for title seasoning under Freddie's guidelines? Thanks folks.

Suzanna

Originally posted by @Suzanna Lam :

Hi,

Out of curiosity, has any one had this situation before?

Borrower purchased a SFH 2 months ago as investment property, took the project subject to a 1st loan of $100K and a HELOC of $100K and the rest in cash of $500K. Did a rehab of $50K. Property is now appraised at $1M. Borrower would like to do a refi CO now to pay off the existing 1st and 2nd and pull out some cash (as much as possible). Delayed financing doesn't work because the subject property has two liens on it. Any other ideas how to structure this refi CO now instead of waiting another 10 or 4 months for title seasoning under Freddie's guidelines? Thanks folks.

Suzanna

 HI Suzanna,

Delayed financing does not work not because you have to purchase a property with cash all from your own sources via borrowed, cash, or savings, etc.

You could always cash out refinance to 75% of market value with freddie on primary and 65% on non owner. Fannie does not do high balance cash out and Freddie can only cash out on high balance cash out on non owner if you have 1-4 financed properties total and no more.

They could always go to a portfolio lender or private lender to cash out as well.

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