do I need 20% down on investment loan?

[Kevin McDonald]

I have 3 investment properties now. My current properties I bought cash (using my HELOC on personal residence) they needed tons of work once I did all the work (sweat equity) and got them rented I would get a cash out 30 year loan to pay myself back. I could do this because when I was done the houses would appraise for a lot more then the loan amount I was asking for (I think my loans were for about 80% of house values).

I am looking at properties now that don't need a ton of work and I was looking at getting a standard mortgage from the start (instead of paying closing costs twice).  If I purchase a house that appraises for 135K and I pay 100k do I still have to put 20k down to get a loan, or could I get away with less money down?

Thanks   

[Chris Mason]

Originally posted by @Kevin McDonald:

I have 3 investment properties now. My current properties I bought cash (using my HELOC on personal residence) they needed tons of work once I did all the work (sweat equity) and got them rented I would get a cash out 30 year loan to pay myself back. I could do this because when I was done the houses would appraise for a lot more then the loan amount I was asking for (I think my loans were for about 80% of house values).

I am looking at properties now that don't need a ton of work and I was looking at getting a standard mortgage from the start (instead of paying closing costs twice).  If I purchase a house that appraises for 135K and I pay 100k do I still have to put 20k down to get a loan, or could I get away with less money down?

Thanks   

Assuming Fannie money:

- If the purchase contract says $100k and appraisal says $135k, the appraisal figure is thrown out and the lender will only consider the purchase price.

- If purchase contract says $100k and appraisal says $95k, the purchase contract figure is thrown out and the lender will only consider the appraised value.

After six months on a refinance, purchase price is thrown out and only appraised value is considered regardless of which is less.