Refinancing out of HML

5 Replies

If I were to buy a 4 unit building using a HML. Would it be possible to refinance using an FHA loan after 6 months or so of seasoning?-- assuming I am living in the property and renting out the other 3 units..

Would the FHA loan have to be in my personal name or can it be in the name of my LLC?

Hi @Heath Thomas Jr . As far as I know HMLs won't do owner-occ's. A blessing in disguise, IMO. I would reserve any HML borrowing to an extremely good value deal with a quick turn around.

Is HML your only option? No savings? A much bigger issue. Cut out all non-essentials and work, work, work to do this right. Happy 2016!

Originally posted by @Steve Vaughan :

Is HML your only option? No savings? A much bigger issue. Cut out all non-essentials and work, work, work to do this right. Happy 2016!

It's mostly for the speed of HML we could easily come up with the down payment. However, from what I've seen many of the deals in our area (Washington DC- Baltimore) are highly sought after and you can't wait for FHA financing to kick in. Our HML has extremely reasonable rates but I think FHA rates could be a little more favorable.

@Heath Thomas Jr gotcha. Don't buy your primary in an entity. You'll lose the awesome benefit of a tax-free gain at sale and I really doubt FHA would allow anyway. Not many folks the program was designed for out there buying property in entities!

@Heath Thomas Jr  If you are looking to OO the property, then I am presuming you are buying with HML as the property needs rehab. May I suggest FHA 203(k) loan instead. It will allow you to buy a property that needs rehab and lets your roll the cost of the rehab into the loan. You only put 3.5% of the purchase+rehab cost as down payment.

What @Upen Patel said. The 203k is a great product, but closing does take a while. You may also want to look at non-hard money portfolio loans with smaller local and regional banks. 

Also, FHA loans are for individuals only, unless the rule changed fairly recently.