Limits for FNMA cash-out refinance?

Question

I'm trying to understand the Fannie Mae (FNMA) cash out refinance limitations.  Is it that you can only do it 4 times, or you can only have a total of 4 FNMA loans before they won't do it?

So for example, let's say I have 4 FNMA loans (maybe a mix of purchase and refinance, although I don't think it matters), and I pay those off with a blanket loan, so I'm back to 0 FNMA loans.  Can I then do another FNMA cash out refinance?

And bonus question, if I use a HML to fund a project, how long do I have to wait under FNMA guidelines before I can utilize their cash out refinance program against the ARV?  I can never remember if it's 6 months or 12 months.

Shane B. · Answer

I believe the cash out limit is 4, but 10 total mortgages. You would be able to do another cash out refi on a property owned free and clear after paying the 4 off with a blanket loan. Obviously, the blanket loan homes would all have "liens" on them. However, you can pay another mortgage off. For example what I have done is take my purchase price plus my estimated rehab price, and I put a deed of trust (mortgage, lien) on it. You can then pay off the mortgage or 75% LTV, whichever is less. You can also retroactively file the deed of trust with your county (depending on local rules) where you go actually make all renovations, know the exact amount, file a DOT, and then pay it off. You can do take out financing via the refi after 6 months. - works well for private money.