Hard Money Refinancing - Repair Escrow & Reserve Requirement

Hard Money Refinancing - Repair Escrow & Reserve Requirement

Residential Redeveloper · Dallas, TX · Member since 2016 · 26 posts · 6 votes

I am currently in the middle of a rehab on an investment property that I purchased using a hard money lender. I would like to refinance out of the hard money loan to a conventional loan pretty soon. My question is, if I were to withdraw repair funds from the escrow account after repairs are complete, would those funds be eligible in order to satisfy the “6-12 month cash reserve” requirements of the new conventional mortgage on an investment property?

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  • Lender · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
    9y

    Seasoning of reserve funds will depend on the lender you use.

  • Residential Redeveloper · Dallas, TX · Member since 2016 · 26 posts · 6 votes
    9y

    Yes sir, understood. However, my question is more related to the source of the reserve funds, not necessarily seasoning requirements.

  • Norfolk, VA · Member since 2016 · 17 posts · 4 votes
    9y

    My advice. Put the money in the bank long enough to have at least 2 "clean" statements (you can't see when it was deposited), then they won't source it. 

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