All Forum Posts by: Jerry Padilla

@Enrique H.

You just need to work with a lender that is familiar working with investors and able to lend in Indiana. 

You can cash out 75% LTV on a SFR investment property. After 6 months from purchase you can cash out based on the value of the property.

@Desiree Steele

As mentioned above you can still qualify for an FHA mortgage as long as that property that you are purchasing now is treated as an investment.

Another consideration, to make is cash out refinancing that property and using that cash as a down payment and going the route of conventional and avoiding mortgage insurance - which is only required above 80% LTV.

Also, Home Possible has no income restricted areas that may be worth looking into and this program has discounted mortgage insurance as well as low down payment for a Primary multi-family residence.

@Haider Nazir

That would be an overlay for that lender. FHA allows you to use potential rental income on the other units;

INCOME—RENTAL

• Any net rental income from the subject property must be added to the borrower’s qualifying gross monthly income by applying 75% of the lesser of;
• Fair Market Rent reported by the appraiser; or The rent reflected on the existing or proposed lease agreement.

@Kristopher Tyler 

Is there an MLS listing that you can PM me?

CONVENTIONAL PURCHASE;

• Gift funds are not allowed on Investment property transactions.
• Escrows for taxes and insurance are required unless otherwise approved by the underwriter.
• Loans for investment properties are not eligible if the transaction includes non-arm’s length and/or at-interest characteristics
• Investment property transactions cannot close in trust.
• Maximum 2% sellers concessions is allowed!!

You can borrow for up to 10 conventional mortgages! You have the option of a 15, 20 or 30 year term.

For A Fixed Rate Purchase, Investment properties, Mortgages 1-6;

• A SFR requires a LTV of 85%
• A MFR requires a LTV of 75%

For A Fixed Rate Purchase, Investment properties, Mortgages 7-10;

• A SFR requires a LTV of 80 - 85%
• A MFR requires a LTV of 75%
• Minimum credit score of 720

For all 1- to 4-unit investment property transactions, cash reserves equal to 6 months PITI for the subject property are required.

Cash Reserve Requirements;

6 months PITI is required on subject property.

If you have 1-4 financed properties than it is now 2% of all unpaid principle balances.

If you have 5-6 financed properties than it is now 4% of all unpaid principle balances.

If you have 7-10 financed properties than it is now 6% of all unpaid principle balances.

Money must be in account for 60 days or sourced. A HELOC can be used as down payment, but not as cash reserves.

RATE & TERM REFINANCING;

Maximum Loan Limit Look up for your area can be found here;

Look Up Conforming Limits For Your Area!

• Current appraised value is used to determine LTV
• Property must not be for sale, and must be taken off the market on or before the disbursement date.
• A Rate & Term Refinance can be used to pay off existing unpaid principal balances on the subject property, closing costs, prepaids, and points.
• No seasoning requirement.

Freddie Mac and Fannie Mae are both conventional lenders. They each have their own set of guidelines to be followed. There are investor friendly lenders that are able to specifically follow just one set of guidelines below. Below are the required LTV for Rate and Term Refinances.

Freddie Mac - min credit score : 620 - up to 6 mortgaged properties

Fannie Mae - min credit score: 620 - up to 6 mortgaged properties

Min credit score: 720 - 7-10 mortgaged properties & minimum loan amount of $50k at property 7 and above.

THESE ARE FOR MORTGAGED Properties 1-6; For Freddie Mac, a Rate and Term Refinance for a Primary Residence;

• 95% for 1 unit
• 85% for 2 unit
• 80% LTV for 3-4 units

THESE ARE FOR MORTGAGED Properties 1-4; For Fannie Mae, a Rate and Term Refinance for a Primary Residence;

• 1 unit - 95%
• 2 unit - 85%
• 3-4 unit is 75%

THESE ARE FOR MORTGAGED Properties 1-6; For Freddie Mac, a Rate and Term Refinance for an Investment Residence;

• 80 - 85% for 1 unit and 75% for 2-4 Units..... Up to 6 mortgaged properties allowed.

THESE ARE FOR MORTGAGED Properties 1-10; For Fannie Mae, a Rate and Term Refinance for a Investment Residence;

75% for 1-4 Units

Fannie Mae Guideline for Rate & Term, Mortgaged Property 1-6.

Fannie Mae Guideline for Rate & Term, Mortgaged Property 7-10.

Freddie Mac Guideline for Rate & Term.

Cash Reserve Requirements;

6 months PITI is required on subject property.

If you have 1-4 financed properties than it is now 2% of all unpaid principle balances.

If you have 5-6 financed properties than it is now 4% of all unpaid principle balances.

If you have 7-10 financed properties than it is now 6% of all unpaid principle balances.

Money must be in account for 60 days or sourced. A HELOC can be used as down payment, but not as cash reserves.

Acceptable Sources of Reserves; Cash and assets that are liquid or near liquid

• Checking or savings accounts
• Investments in stocks, bonds, mutual funds, certificates of deposit, money markets funds and trust accounts
• The amount vested in retirement savings accounts
• Cash value of a vested life insurance policy

  Certain assets must be “discounted” when used for reserves. Terms and conditions of liquidation may be required depending on the asset used for reserves.

  Assets Requiring Liquidation
  The following may be counted as cash assets at 100% of verified liquidated amounts:

  • Cash value of life insurance
  • Publically traded stocks
  • Bonds
  • Mutual Funds
  • U.S. Government Securities
  • Savings Bonds
  • Retirement Funds
• Gift Funds - Primary Residence and Second Home ONLY

STATES WE LEND IN:

Alabama, Alaska, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming

@Michael Ede 

ADU's are common for the area, so I am not sure why that is an issue. There is no seasoning for a rate and term refinance. I don't see any issues from what I am reading, but maybe I am missing something. Feel free to reach out with questions.

@Tiffany Smith 

What is the current value of the property? 

You may be able to rate and term refinance the property with conventional financing. For a conventional rate and term refinance on an investment property you will need an LTV of 75%, for a duplex. At this LTV you will also avoid mortgage insurance - giving you a decent savings as well.

@Michael Backer

Sorry for the misunderstanding. I was explaining how clients are able to get approved for more mortgages. Many investors starting out have the misconception that they need a 2 year landlord history to count rental income.

@Lee Hughes

You could do a HomeStyle renovation loan and go as low as 15% down, on an investment property. This will keep costs to a minimum. 

@James Free

Delayed Financing is a great option prior to 6 months. It is limited to; 

- The new loan amount can not be more than the actual documented amount of the borrower's initial investment in purchasing the property, plus the financing of closing costs, prepaid fees, and points (subject to the maximum LTV).