Refinance out of a FHA 203k Streamline with Equity from Rehab
I am in the process of looking for a MFH to buy and rent out with a small budget. I wouldn't mind doing a house hack, but my wife is a little more hesitant. Then today, I had an idea that I wanted feedback on. I would buy a house that needs some TLC with a 203k streamline at 3.5% down. Then I would pay a GC to do minor renovations. The repairs would be done within the 6 months allowed. And when done, the house would be worth more so I would refinance into a conventional loan with the equity gained from the remodal.
At purchase-
- Loan Amount: $130,275 ($100,000 + $35000 with 3.5% down)
- House Value: $100,000
After reno and 6 payments-
- Loan Amount: $126,621
- House Value: $163,000
- LTV: 77%
Questions for you-
- After the reno, with a LTV of less than 78%, could you refinance into a conventional?
- Would refinancing mean you wouldn't have to live in the property like with a FHA?
- Is this feasible?
- Is this legal?