Long term financing with little to NO seasoning period

Member since 2023 · 31 posts · 27 votes

Hi everyone, I'm a real estate investor in Philadelphia and have secured hard money financing for my latest investment property. Once the renovation is complete and I rent it out, I'd love to refinance ASAP. Would love any recommendations for long-term financing options that can all but eliminate the seasoning period. Thank you!

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Erik EstradaBusiness Member

Lender · Member since 2022 · 6k+ posts · 1k+ votes

Quote from @Jessica Stern:

Hi Jessica,

You can do no seasoning on a rate and term refinance (just pay off the hard money loan) or up to 75% on a delayed purchase refinance limited to 75% of the PP and rehab cost or Appraised value (whichever is lower)

[email protected]818-269-7983

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Alan AsriantsBusiness Member
Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
3y
@Gaetano Ciambriello might be able to help
[email protected]267-767-0111
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Gaetano Ciambriello
Lender · Member since 2021 · 277 posts · 150 votes
3y
You can do a cash-out refinance after 12 months if you want to use the ARV for a conventional loan.
Non-QM loans typically have a 6 month seasoning period!
If you wanted to do a delayed cash-out refi, that can be done right away but the 75% loan is based on purchase price and not the value. Not worth it in this case.
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John Chong
Lender · Houston, TX · Member since 2023 · 235 posts · 255 votes
3y
You can do a cash out refi under the 3 months but it won't include your new ARV number. There's a 90 day seasoning period to cash out 70% and after 6 months it goes up to roughly 75%.
You can also do a rate-term refi to bring down the rate from the HML.
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Matthew DaviesBusiness Member
Lender · Tampa, FL · Member since 2023 · 22 posts · 6 votes
3y
There are certainly some nuances when it comes to each lender and DSCR programs. It is always good to chat to a few to understand where the sweet spots are. I know that some lenders can do 75% cash out after 90 days of seasoning on the ARV.
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Abe AlamPro Member
Member since 2020 · 62 posts · 5 votes
3y
Quote from @Jay Hurst:

Quote from @Jessica Stern:

Hi everyone, I'm a real estate investor in Philadelphia and have secured hard money financing for my latest investment property. Once the renovation is complete and I rent it out, I'd love to refinance ASAP. Would love any recommendations for long-term financing options that can all but eliminate the seasoning period. Thank you!

@Jessica Stern

The strategy we use all the time which is to give borrowers a bridge loan for your cash out. It is our money and our loan so we do not have any seasoning requirements (assuming a solid appraisal of course) In that case we would lend you 75% of the appraisal. We would then refi you into a conventional loan right away using the same appraisal. This gets you around the seasoning requirements as they ONLY applies to cash out loans. In this case the conventional loan is NOT cash out, but rather a rate/term refi where you can use the improved value. So, you get your cash out and your fixed rate all right after the property is complete.

Jay, are you proposing a solution around the 12 month conventional seasoning requirement that is now in place?

@Jay Hurst
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Caroline Gerardo
Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
3y
@Abe Alam 12 month for GSE (Fannie Freddie ) conventional loan to use the new higher value not the purchase price. February 7th 2023 this changed as was 6 months before. GSE's tightening rules.
3 months for DSCR but rate is higher. $111000 no cash out much cheaper than $206250 in rates.
NonQM there are two that do three months full documentation. or it's 6 months bank statement or DSCR
Does your hard money loan have an early payoff penalty? How much?
Fishtown? Chestnut Hill? University City? These neighborhoods and a few others are holding but others are declining in value as I write this. Get a Realtor to give you sold comps with a loan in past 3 months before you order the appraisal.
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Jay HurstBusiness Member
Lender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
3y
Quote from @Abe Alam:

Quote from @Jay Hurst:

Quote from @Jessica Stern:

Hi everyone, I'm a real estate investor in Philadelphia and have secured hard money financing for my latest investment property. Once the renovation is complete and I rent it out, I'd love to refinance ASAP. Would love any recommendations for long-term financing options that can all but eliminate the seasoning period. Thank you!

@Jessica Stern

The strategy we use all the time which is to give borrowers a bridge loan for your cash out. It is our money and our loan so we do not have any seasoning requirements (assuming a solid appraisal of course) In that case we would lend you 75% of the appraisal. We would then refi you into a conventional loan right away using the same appraisal. This gets you around the seasoning requirements as they ONLY applies to cash out loans. In this case the conventional loan is NOT cash out, but rather a rate/term refi where you can use the improved value. So, you get your cash out and your fixed rate all right after the property is complete.

Jay, are you proposing a solution around the 12 month conventional seasoning requirement that is now in place?

@Jay Hurst

I am! We are doing it a lot.
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Abe AlamPro Member
Member since 2020 · 62 posts · 5 votes
3y
@Jay Hurst sent you a message
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