Raynham, MA · Member since 2019 · 7 posts · 1 vote
Greetings, everyone! I thought of a new strategy idea today that I wanted to present to the biggerpockets community and see if anybody knows if it is possible or if they have done it themselves. So to start, if I were to purchase a 3-4 unit property that needed work with a hard money loan of about 70% ARV, and then purchased and renovated the property, would it be possible to refinance out of the hard money loan and into a FHA loan if i planned to live in a unit? That way, the FHA loan would be for 96.5% of the homes value, and the hard money loan would only be for 70% arv plus points and interest. This would technically leave a good chunk of change left over after paying the hard money lender.
Greetings, everyone! I thought of a new strategy idea today that I wanted to present to the biggerpockets community and see if anybody knows if it is possible or if they have done it themselves. So to start, if I were to purchase a 3-4 unit property that needed work with a hard money loan of about 70% ARV, and then purchased and renovated the property, would it be possible to refinance out of the hard money loan and into a FHA loan if i planned to live in a unit? That way, the FHA loan would be for 96.5% of the homes value, and the hard money loan would only be for 70% arv plus points and interest. This would technically leave a good chunk of change left over after paying the hard money lender.
Yes you can refi into FHA, no you can't refi based on "planning" to live there, and no it will not be at 96.5% LTV cash out refi.
- 96.5% FHA is for rate/term refinances and purchases only, cash out refis on 2-4 unit props are capped at 85%.
- You need to be living there and have all your personal stuff there on the day the appraiser shows up, and for a year thereafter.
- FHA in general has a bunch of anti-investor rules in their guidelines, I'm sure there's something else that I'm not thinking of at present from their 1000 pages of guidelines.