Buy with Spouse & then refinance to take me off- Down Payment Q

[Rian Ash]

Hi BP Members,

Both my wife and I own 4 properties each- separately. I am looking to buy another one (rental). We want to buy together, then refinance and take myself off the mortgage and the title. The thing is that with the original purchase, the down payment money will be coming from my account only (a heloc) - Will that be an issue with refinance if we do the refinance in let's say a month? 

I looked at the Fannie Mae guidelines but there is nothing which covers this scenario. It is clear that you cannot accept gift for buying investment properties. In a way, I am going around this guideline but before I go and execute this strategy, I want to make sure I will be able to do the refinance.

Thanks for your help!

[Eric Veronica]

@Rian Ash technically your loan would qualify as a rate and term refinance which means that seasoning and delayed financing don’t really come into play... “technically”

As you stated, there is nothing in fannies guidelines that explicitly addresses this scenario so you introduce the concept of “underwriter discretion”  Scary word. I wouldnt be surprised if it worked and I wouldn’t be surprised if it didn’t.  

@Chris Mason stated that he has a deal where the underwriter asked to source the funds. This is the type of grey area that even the most skilled loan officers will struggle to get you an answer.  If a loan officer pro-actively asks this type of question to underwriting management without context I feel like it’s more likely to get shot down. If you just submit it then it might work and it might not. 

You could always try it at the 90 day seasoning period. If it closes great. If they tell you wait then you just sit on the loan for a couple months and then close on the 6 month anniversary.  Appraisal and credit report should still be good.