BRRRR Refinance Help Purchase Price

[Martin Neal]

Hello everyone,

I need some help. I am in the Chicagoland area trying to do a BRRRR Strategy and having some problems with the lender, First Midwest Bank. I'm being told that the maximum amount of the refinancing loan will be the purchase price from two months ago BASED ON Delayed Financing Exception.

Purchase Price: 42K Rehab Cost: 23K

She advised this was Fannie Mae lending Guidelines and there is nothing she can do.

"The new loan amount can be no more than the actual documented amount of the borrower's initial investment in purchasing the property plus the financing of closing costs, prepaid fees, and points on the new mortgage loan (subject to the maximum LTV, CLTV, and HCLTV ratios for the cash-out transaction based on the current appraised value)."

https://www.fanniemae.com/content/guide/selling/b2/1.2/03.html

I would like to get as much out as possible and move to the need deal. I use HELOC to fund this deal.

Can anyone give me some advice on how to proceed ?? Thanks in advance.

[Alexander Felice]

@Martin Neal Youll have to wait the 6 month seasoning period. Next time, when you do a BRRRR Add your rehab, insurance and ancillary costs to the HUD. the rule is commonly said as "you can get out only what you paid for the house" but this incorrect. The rule is you can get out 100% of HUD. This is not a difference in semantics, put your costs on the HUD and you can refi out 100% of your cost. I have done this many time and written about it extensively on both BP and my website if you wqnt to learn more. I h