All Forum Posts by: Jerry Padilla

@Tyler Winchell

It all depends on what you can afford.

There are both conventional and portfolio products to refinance out of hard money.

Conventional you will see the lowest rates, but are required to have a stable employment history of 2 years, as well as your DTI's, income, credit and assets will all be taken into consideration to qualify.

@Michael Osborne

You will have to purchase as an investment property. Most lenders have a 30-60 day requirement to move into the property. It is over a year away. What would you do with the property for that year?

@Juan Carlos Castillo

You have the option of portfolio lending. The rate is going to be higher than conventional. There is a loan minimum with this program that I am aware of $100k. What is the purchase price of the property?

@Seth Huish

You do have Renovation options to purchase. Freddie Mac and Fannie Mae both have conventional options for renovation loans.

HomeStyle and ChoiceRenovation are two of the options that allow for SFR investment properties.

@Tony Gyra

One of the challenges with this strategy can be the appraisal.

Providing documentation on the improvements made can help justify the increased value of the property.

@Justin Lee

Yes. 75% LTV. But you would only be able to get back a maximum of your initial purchase price plus closings costs, which Is the limit prior to 6 months with conventional.

@Justin Lee

Jaron,

Had a great explanation.

Did you initially pay cash for the property?

Are you looking to refinance out of hard money with out cash back?

A refinance without cash back has no seasoning requirements. An investment property can get an LTV of 80 - 85% for a SFR and 75% for a MFR.

If you have owned, or will have owned by closing the property for 6 months you can cash out refinance based on appraised value with an LTV of 75% for a SFR and 70% for a MFR.

@Jeffrey Townsend

It is still based on appraised value, but you can’t get back anymore than what you paid initially did the property. 

For example;

Purchase price - $60k on a SFR investment.

Closing costs - $4k

Initial purchase - $64k

Renovations - $15k (not in your initial purchase) There are ways to attempt to get renovations included, but there is no guarantee as Fannie Mae is cracking down on including renovation s.

New appraised value - $120k

LTV allowed 75% ($90k) but because you are limited to your initial purchase you can only cash out $64k (possibly the $15k as well, if it is included on the closing docs of the initial purchase and structured in a way that the underwriter accepts it)

@Brian Gerlach

Yes - A HELOC tied to any property is able to be used.

@Lindsay Crawford

There are no limits on refinancing.

There is a one year requirement of living in the property, just like any other conventional loan. There is the option with this loan for a second home or an investment property, so you have the ability to have a few at the same time.