BRRRR Strategy Question -- If I am using cash to buy the property and cash to rehab the property, when I go to refinance is there still a seasoning period before I can get a loan? Or in this case would this be different since there isn't an initial loan to refinance?
Real Estate Investor · Palm Beach County, FL · Member since 2017 · 3k+ posts · 2k+ votes
7y
Yes there will be a 6 month minimum seasoning requirement if you refinance with a conventional Fannie/Freddie loan. You can circumvent this by using a commercial/portfolio loan but the rate and term will be less favorable. Alternatively since you're purchasing with cash you can use the delayed finance exception which has no seasoning but going this route won't allow you to use the ARV for the refinance.
Real Estate Investor · Palm Beach County, FL · Member since 2017 · 3k+ posts · 2k+ votes
7y
Yes there will be a 6 month minimum seasoning requirement if you refinance with a conventional Fannie/Freddie loan. You can circumvent this by using a commercial/portfolio loan but the rate and term will be less favorable. Alternatively since you're purchasing with cash you can use the delayed finance exception which has no seasoning but going this route won't allow you to use the ARV for the refinance.
@Brian Garrett Thanks Brian. So if I were to use a hard money lender or regular financing for the property the seasoning period would be 12 months. If I am using cash and want a conventional loan there would be a minimum of 6 months seasoning.
@Brian Garrett Thanks Brian. So if I were to use a hard money lender or regular financing for the property the seasoning period would be 12 months. If I am using cash and want a conventional loan there would be a minimum of 6 months seasoning.
No the seasoning is not 12 months. That is just a bank overlay. Per Fannie/Freddie guidelines the seasoning is 6 months for conventional.
Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
7y
It all depends on the bank. We've worked with some banks that will refinance at appraised value the day it's rehabbed and rented. Others want as much as 2 years seasoning. You just have to ask around and figure out what each bank is willing to do.