Searching for lenders who don't require a seasoning period BRRRR

17 Replies

Hello BP!

Do you guys have any recommendations for lenders who do not require a seasoning period? I am trying to refi some properties in Columbus, Ohio. 

Originally posted by @Bryan Pham :

Hello BP!

Do you guys have any recommendations for lenders who do not require a seasoning period? I am trying to refi some properties in Columbus, Ohio. 

 Hi Bryan,

You're probably looking at portfolio stuff with absurd rates and high closing costs. Are you sure six months from purchase is too long to wait?

If you bought them with cash and there is no mortgage lien on the property, then you can go delayed financing up to the purchase price and a max. LTV of 75% of the appraised value. Or you can go portfolio with higher rates, or wait out the 6 months for the Fannie Mae cash out refinance.


Originally posted by @Chris Mason :

Originally posted by @Bryan Pham:

Hello BP!

Do you guys have any recommendations for lenders who do not require a seasoning period? I am trying to refi some properties in Columbus, Ohio. 

 Hi Bryan,

You're probably looking at portfolio stuff with absurd rates and high closing costs. Are you sure six months from purchase is too long to wait?

Hey Chris,


In a scenario where the overall goal is to move fast and acquire a set number of doors for the year (50), would it still make sense to accept the absurd rates and high closing costs for houses ranging from 25k-150k as long as the cash flow is still positive? I m trying to weigh out the pros and cons of waiting 6 months for my money to be freed up again or continue moving fast knowing that the interest rates and closing cost are not in my favor. But still cash flow and still hit my goal of 50 doors. 

Originally posted by @Bryan Pham :


Originally posted by @Chris Mason:

Originally posted by @Bryan Pham:

Hello BP!

Do you guys have any recommendations for lenders who do not require a seasoning period? I am trying to refi some properties in Columbus, Ohio. 

 Hi Bryan,

You're probably looking at portfolio stuff with absurd rates and high closing costs. Are you sure six months from purchase is too long to wait?

Hey Chris,


In a scenario where the overall goal is to move fast and acquire a set number of doors for the year (50), would it still make sense to accept the absurd rates and high closing costs for houses ranging from 25k-150k as long as the cash flow is still positive? I m trying to weigh out the pros and cons of waiting 6 months for my money to be freed up again or continue moving fast knowing that the interest rates and closing cost are not in my favor. But still cash flow and still hit my goal of 50 doors. 

 Ah, I didn't realize we were talking about such high unit counts. You're going to be in commercial territory before long. 

I'd start inquiring with local (to the real estate) commercial banks about blanket mortgages. Their stuff is ALL portfolio, and tends to be priced better than residential portfolio. 

Originally posted by @Kevin Romines :

If you bought them with cash and there is no mortgage lien on the property, then you can go delayed financing up to the purchase price and a max. LTV of 75% of the appraised value. Or you can go portfolio with higher rates, or wait out the 6 months for the Fannie Mae cash out refinance.

This from page 190 of the Fannie Mae Selling Guide: "Properties listed for sale in the six months preceding the disbursement date of the new mortgage loan are limited to 70% LTV/CLTV/HCLTV ratios (or less"...

Their Delayed Financing Exception section then goes on to explain that the mortgage cannot exceed the original purchase cost (regardless of LTV percentage).

Kevin, is there anywhere that says the LTV can be as high as 75% for the Delayed Financing Exception?...

@Bryan Pham how long will it take to recuperate the fees and increase in interest from the additional units. For example, if you bought 25 units that average $250 per door vs. paying more fees and higher interest to average $100 over 50 doors, when is break even?

@Brent Coombs You are confusing properties that are listed for sale by the seller and properties that were listed on the market and then bought by the borrower and are now being refinanced by the borrower? 

The guideline you are referring to would be if the owner and borrower on the loan request had previously listed their property for sale, then yes, they get a max. of 70% LTV. 

However the situation you have on a delayed financing transaction is one where the borrower requesting the cash out, was the one that bought the home off the market for cash or no mortgage lien, within the last 6 months and now wants a cash out refinance up to the original purchase price but no more than a max. of 75% LTV. 

I know it can be done because I have done them. I even closed on a 80% LTV delayed financing because in that case it was owner occupied. 

Below are the guidelines, please review them so the wrong information doesn't get disseminated 

@Kevin Romines , and yet, if you're asking for a mortgage for that same single unit (having not paid for it yet), you can borrow up to 85% LTV! (Yes I know, that's not as good as getting 100% money back if you paid for a bargain with cash!)

Hmm. It does look like Lenders can now fudge the previously specific 70% max (seemingly removed from the DFE notes).

@Brent Coombs It sure seems as if you are accusing lenders of fudging numbers? If I have that wrong, I apologize, but I take great offense to your accusation otherwise. 

I'm a lender, I play it by the book. If Fannie didn't allow this to happen and have guidelines written to that effect, I wouldn't be doing it. Don't make this out to be some scum lender is bending or flouting the rules, because we don't stay in business (22 years) doing that kind of thing. 

Oh and you seem to be confused as the great deal that this is? 

Lets say you have a house with a $150,000.00 purchase price and your are taking out a Non-owner, Fannie Mae loan to buy it at 85% so your loan amount is $127,500.00 and your down payment was $22,500.00 and the appraisal was $207,000.00. So you had a down payment of $22,500.00 + closing costs of lets say $5000.00 so $27,500.00 out of pocket that you wont be getting back any time soon?

Or

You pay cash and because it appraised at 207K you can now do a cash out refinance with delayed financing for $155,250.00 the same amount that you bought it for plus closing costs? In this scenario you have all your money back out the deal?

The 80% LTV delayed financing I did for my buyer was exactly that. He paid cash because he had to close quick because it was a wholesale deal. The property appraised well enough and passed the appraisal even though it needed updating that he got his $240,000.00 cash back at closing which covered his purchase and closing costs. Now he has effectively zero dollars into the deal?

You decide if that may be a better situation, I know what my thoughts are? 

@Bryan Pham You have to go to a non-Fannie Mae loan product such as portfolio or commercial. To do this, contact local small to mid sized community banks. As what was mentioned, the rates will be different. However, contrary to what was mentioned, my closing costs have actually been much lower than Fannie Mae loans. True, my rates are about a percent more ( some people report here that they did not have that high, this is dependent on your bank), and there is a balloon after a certain number of years, which is common on commercial loans. Also, the paperwork that they require is much less than Fannie. To get the best rates, sometimes it is best to wait on Fannie, assuming you have less than 10 loans.
@Bryan Pham Talk with local commercial lenders. Mine will go 85 LTC with no seasoning. 1% fee to close and about 5.5-6% interest. 20 year am, 5 years fixed.

Hello Brian,

If you lived in the state where the property is located I would suggest a local community bank, however this is not the case. With that said I do believe there is a national lender who can help if you have owned the property for at least 30 days. And, there are several if you have owned the property for at least 3 months. Look at the lender list here on BP.

Originally posted by @Kevin Romines :

@Brent Coombs It sure seems as if you are accusing lenders of fudging numbers? If I have that wrong, I apologize, but I take great offense to your accusation otherwise. 

I'm a lender, I play it by the book. If Fannie didn't allow this to happen and have guidelines written to that effect, I wouldn't be doing it. Don't make this out to be some scum lender is bending or flouting the rules, because we don't stay in business (22 years) doing that kind of thing. 

I surrender! To quote myself from this other thread: https://www.biggerpockets.com/forums/49/topics/308...

"Cheers, Brad. I hope we're all here to keep learning (I certainly am)..."

[@Brad Smith (another Lender), had just written: "With Deferred Financing Exception, you can cashout up to the purchase price or 70% LTV, whichever is less, right away. If you can wait the 6 months, you can C/O to the highest LTV that new appraised value and lender overlay will allow, probably 85%."]

Yes, I see that @Jerry Padilla mentioned the DFE could do 75% LTV for mortgages 1-4 on single units only, which flew in the face of my understanding per the "70%" quote that I used above from Fannie's own site [which I still reckon was also mentioned in their DFE notes until it disappeared].

I agree, I should not have inferred a "fudging" by any Lenders. Sorry.

Originally posted by @Kevin Romines :

Oh and you seem to be confused as the great deal that this is? 

Lets say you have a house with a $150,000.00 purchase price and your are taking out a Non-owner, Fannie Mae loan to buy it at 85% so your loan amount is $127,500.00 and your down payment was $22,500.00 and the appraisal was $207,000.00. So you had a down payment of $22,500.00 + closing costs of lets say $5000.00 so $27,500.00 out of pocket that you wont be getting back any time soon?

Or

You pay cash and because it appraised at 207K you can now do a cash out refinance with delayed financing for $155,250.00 the same amount that you bought it for plus closing costs? In this scenario you have all your money back out the deal?

The 80% LTV delayed financing I did for my buyer was exactly that. He paid cash because he had to close quick because it was a wholesale deal. The property appraised well enough and passed the appraisal even though it needed updating that he got his $240,000.00 cash back at closing which covered his purchase and closing costs. Now he has effectively zero dollars into the deal?

You decide if that may be a better situation, I know what my thoughts are? 

Why do you think I'm confused about borrowing 100% of your outlay under the DFE rules? Of course that's "great"!

I would talk to Union Savings in Columbus or even a few different commercial banks. Surprisingly as well one of our clients who bought a lot of units loved working with US Bank commercial department in columbus. I'd recommend talking to both.