Is anybody getting 75% LTV on cash out refi of a multi unit?

Question

Trying to do a cash out refi on a duplex. To get to where I want to be, I'm looking for 75% LTV. Fannie/Freddie is 70%. It's like I'm asking for the moon. Even the local banks are no help. What are others finding?

Specifics:Chicago far west suburbsCurrent appraisal: $175KCurrent mortgage: $90kCredit score:800+Liquid cash on hand: $75KPersonal DTI:<20%Total DTI not including rental income:<30%

I would think this is a home run.

Tom Shallcross · Answer

@Tony Salemi - both Liberty Bank and Wintrust are doing 75% LTV on commercial products at this moment. However, DSCR, loan size, and credit much be in line. Feel free to DM me and I'll send you my contacts there.

Stephanie P. · Answer

@Tony Salemi

It's more like a really long foul ball that hooks just to the outside of the foul pole. Looks good, looks good and then starts hooking and it lands in some guy's beer.:) All the numbers look great, but the loan won't get bought by Fannie Mae or Freddie Mac because they limit the ltv on units so it's a no go for conventional financing.

A DSCR loan will go to 75%. They're a little more in interest rate (high 4's) and cost a couple points, but they close and you get your cash. No income verification, no pay stubs. Pretty simple loans that close in 30-45 days depending on the length of time it takes to get the appraiser out there and back.

Stephanie

George Despotopoulos · Answer

Hey @Tony Salemi - if it's rented and you've owned it for more than 3 months, then you can easily do a 75% LTV cash-out refi (as long as the property's rental income was enough to cover the monthly loan payment).

Tom Jeffries · Answer

You should look for a commercial loan to get to the $131,250 loan amount. 75% leverage can be done depending on the DSCR of the property for 2020 and the rent roll.

Stephanie P. · Answer

Brie

To give you a snapshot of DSCR lending right now, a cash out, 30 year fixed to 75% ltv with a couple of points (depending on the loan size and a 4 year prepay) is in the high 4% range with a DSCR loan; no balloon or ARM and no LLC required. Many lenders have relaxed the requirements for those loans significantly post Covid while Fannie/Freddie have tightened.

Stephanie

Brie Schmidt · Answer

@Tony Salemi - It is a conforming guideline for residential loans. No bank will give you more than 70% LTV on a NOO cash out. If you want more capital out you need to look at commercial, but then you need to create a LLC and expect a higher rate and a 5 year balloon.

Tony Salemi · Answer

Awesome analogy. About how it feels too. Just got to take a few foul balls until it stays right.

Jonathan Klemm · Answer

@Tony Salemi - I don't know of anyone specific that can help with the specific loan product you need, but was curious what your plan is after you refi?

Are there any banks you've found that would do a line of

Albert Bui · Answer

Prior US bank has been pretty active in lending on cash flow non owner properties

@Brie Schmidt has worked with them in the past with good results in Chicago areas. I heard they stopped lending during covid potentially so you'd have to check back in with them to see if they've reopened up.

If your DSCR for debt service coverage ratio is stabilized you might be able to get up to 75-80% cash out.

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Is anybody getting 75% LTV on cash out refi of a multi unit?

Is anybody getting 75% LTV on cash out refi of a multi unit?

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