Refinance Guidelines
One of our recent videos focused on Investment Properties in Michigan and the opportunities they present.Fannie Mae just released information about Cash Out Refinances that is even better news for Investors.
Previously, Fannie Mae required 12 months from closing on the investment property until the time to apply for a cash out mortgage. A cash out is NOW allowed immediately if no financing was obtained for the purchase transaction.
Guidelines:
- New loan amount can NOT be for more than the initial investment that was used to purchase the property
- Purchase was Arm’s Length Transaction
- You can provide the settlement statement which shows no financing was needed
- New Title search which shows NO liens on the property
- Source of funds for the purchase must be documented with bank statements, loan documents, etc.
- Any new loans used as source of the down payment must be paid back on the new settlement statement
This is great news which may spur more investors, as many properties may require cash sales which allows them to get access quickly to their money to do it again.
Wow-Sound like a step in the right direction. I guess they finally figured the investors are actually helping the economy. Are they NOT requiring 6 months reserves for any other already financed property? The part about about only offering cash out on the amount paid for the property is not the best but its a step in the right direction. I am currently getting financing by a LOCAL bank that holds the loans in house and will loan 75% of the current value(which is after we rehab) which gives ALL of our investment including repair costs. Please contact me to discuss.
Thanks