BRRRR question (Fannie Mae guideline?)

[Tyler Smith]

I bought a home for $120,000. ARV should come out at $200,000.

75% LTV will be $150,000. My rehab will come in at just over $20,000.

My bank just told me with the Fannie Mae guidelines on doing an investment cash out less than 6 months from the date of purchase (I purchased in January 2020), they state you cannot take out more cash than your original investment amount at the time of purchase. And since I purchased this home for $120,000, that means my bank will have to reduce the loan amount down to $127,400 to keep my cash back at $120K with rolling in all closing costs and prepaids. In other words, the bank will be reducing the amount of cash I receive at closing by about $22,500.

This obviously doesn't make sense now as my rehab budget is wiped out. Thoughts?

[Alexander Felice]

you're asking for the delayed finance exception. 

you have to wait 6 months to get a refi based on full LTV without the purchase price cap. You can't get both, the quick refi AND the full amount after you have already purchased.

there are ways to get the quick refi and the full amount, but you have to pay for the rehab on the settlement statement at the time of closing. Now that you have purchased, waiting the 6 months is the only option if you want full amount.