Seasoning requirements/personal loan

[Roselin G.]

Hello investors!

I have a property that I will be privately funding and then planning to cash out refi. 

With the changes to seasoning requirements by fannie mae, I’m wondering how this affects this process.

Any wisdom you can share or anyone who has done this before with using private money/personal loan and then paying back?

[Nicholas L.]

@Roselin G.

DSCR / non QM look for 3-6 months of ownership

[Jay Hurst]

Quote from @Roselin G.:

Hello investors!

I have a property that I will be privately funding and then planning to cash out refi. 

With the changes to seasoning requirements by fannie mae, I’m wondering how this affects this process.

Any wisdom you can share or anyone who has done this before with using private money/personal loan and then paying back?

 @Roselin G.

There are options so you would need to map those out with your loan office BEFORE you purchase. We do it every day so it can be done with non conventional products/bridge loans etc. but you just have to have your plan in place.

And keep in mind these new Fannie/Freddie seasoning requirements ONLY apply to cash out loans. In other words, you can still use the improved value to refi what is owed with no cash back. 

So,  what we do is a double close essentially. We do a cash out loan for you on a bridge loan with no pre-payment penalty pulling out the cash, them immediately refi that new loan amount as a rate/term into a conventional loan for the lower rate/no pre-payment penalty conventional loan. So, again, it just takes a good LO, and a plan.

[Erik Estrada]

Quote from @Roselin G.:

Hello investors!

I have a property that I will be privately funding and then planning to cash out refi. 

With the changes to seasoning requirements by fannie mae, I’m wondering how this affects this process.

Any wisdom you can share or anyone who has done this before with using private money/personal loan and then paying back?

 You can do a delayed finance, which you could take out the purchase price + rehab, but no cash out. 

If it is an investment property, a DSCR with no prepay and 90 days seasoning could work out. If rates do drop significantly in the next 12 month you can rate and term refinance into a conventional loan. Or if rates remain high/or creep up more, you have a peace of mind being on a 30 year term at a fixed rate

But what's the goal here? Do you have another property lined up already? Do you plan on paying down the mortgage on this property? Lots of variables here

[Eliott Elias]

DSCR requires six months seasoning.

[Alex Bekeza]

 @Roselin G. Regardless of Fannie/Freddie's changes there are DSCR based options that will go up to 75% of the new appraised value as early as 90 days on a BRRRR cash out refi. These loans are not backed by Fannie/Freddie and don't have to adhere to those guidelines. (there is no universal rule that DSCR lenders need 6 months seasoning @Eliott Elias

[Simmy Ahluwalia]

Yes, if you are purchasing in cash, you can Refi right away. Typically 70-75% of your total cost. DSCR has a 3-month seasoning, but you can start the process in month 2.