Clarity on 30 yr refi guidelines

[Joseph Hammel]

Hello, Joe here in Minnesota.

I have 12 of my properties financed under traditional 30 year loans. Nine of them are rentals in my name, one is a rental in my wife's name, one is a rental in both of our names, and one is our personal home in both of our names. I also have 3 other properties in commercial loans. I am looking to pull some equity out of some of my properties. 

1. Is it possible for me to refinance any of my traditional loans into new 30 yr fixed loans? I have had this discussion with multiple people but can't get a definitive answer.

2. Can a cash out on a single family have a 80% ltv? My credit unions is at 75% max. Is this an overlay?

3. Can a cash out on a 2-4 unit have a 80% ltv? My credit Union is at 70% max. Is this an overlay?

Thanks in advance!

Joe Hammel

[Bryan Schmidt]

Joe,

First, I am only speaking to residential 1-4 unit loans.  This does not apply to any other loan type.

There are many different lenders with underwriting overlays.  Your credit union has their specific guidelines that they choose to operate with and that is based on their appetite for risk.

The base underwriting criteria for all conventional loans comes from Fannie Mae and Freddie Mac.  You, and every other investor, should be working with a lender that only underwrites to these base guidelines.  99% of lenders do not.

All of my answers are based on these base guidelines - this is what I can absolutely help with - we only underwrite to Fannie and Freddie's base guidelines.  Here are the answers to your questions:

1 - Maybe.  Currently, the maximum number of properties that can be financed in an individual social security number (per person) is 10.  If structured properly (and your documentable income can support it), you can finance up to 20 separate properties between you and your wife.

2 - The maximum LTV for cash-out refinance is currently 80% on a single loan. If combined with some type of HELOC as a 2nd mortgage in addition to that, the max CLTV that we are currently seeing is 95%. This could go down to 90% due to the current state of the market.

3 - The maximum LTV for a non-owner occupied 2-4 unit cash out refinance is 75% on a single loan. The maximum CLTV for a 2-Unit is currently 90% using the HELOC scenario above. Currently, I am not aware of a higher CLTV for a 3-4 unit property.

I hope that helps!

- Bryan