Question for you other brokers on seasoning/appraisals

My FNMA lenders say that they allow rate and term refi on investment properties with no seasoning, but they definitely don’t make it easy when it comes to the appraisal and the increase in value.

Here is what a typical scenario will be for me with an investor:

Purchase - $25k
Rehab - $5k (minimal and cosmetic)

ARV appraised value - $60k

Obviously with the foreclosures out there, these type of deals are abundant. Typically the investor wants to refi out of the HML, or private money loan and pay off the loan and rehab costs.

Are you guys having problems doing these loans conforming (fnma, fdmac)? Who are using, who should I be looking to?

Your help is appreciated.

Also, can this be done stated income on an invest prop if the LTV is low enough?

I think you’re a loan originator, if so, you just need to take your lender list and call the u/w managers for each. Explain that you have a solid appraisal for a property purchased below market value which was rehabbed. You’d like to use a Fannie cash out loan which doesnt require seasoning for new value. They shouldnt have a problem unless internal guidelines established.

Good thoughts Ben…prbably the best way to find out who is doing what. The few that I have talked to want 6 mos on title for cash out, and it seems like rate and term is okay with no seasoning. It seems alot of them are throwing their own guidelines in there too…

Do you think that will have to be considered cash out, being that they’re trying to recoup rehab costs back? Or would it depend on the way the HML or private loan was structured?

Try Wachovia, Homecomings, or CITI I know they are both still doing them full doc. I believe CITI is doing them stated as well. Don’t hold me to that because I have not done one with them in awhile.

Thanks man, I’ll check them out.

LTV isn’t a problem usually b/c they are buying them so cheap, but seasoning and the lender being picky about the value going up so much from purchase price is usually where I have issues.

Just want to point out that underwriting point of view can even be different from one wholesale office to the other, even within the same lender.

For instance, sometimes because of state restrictions a lender may need to send a file to one of their other branches. The u/w team there may view completely different.

As mentioned earlier I always speak to the u/w manager and if there’s a chance that the file will get shipped to another location for u/w I’ll call that manager too. I explain that I specialize in investment loans and have a clear understanding of cash out no seasoning loans under Fannie guidelines. If you make them feel comfortable and they know it’s not sometime of flip scam more than likely the u/w will advise you on what can be done.

I know Wachovia is still doing them that way, although they do have some restrictions in some areas and require 12 month seasoning.

Wachovia does not have seasoning requirements. I have closed multiple no seasoming loans with them.

SunTrust (in Georgia) is also doing no seasoning refis on investment property immediately after purchase.

SunTrust stopped doing cash out loans on investment properties several months back. So doing cash out with NO SEASONING is not possible. This of course is speaking of the WHOLESALE CHANNELS. That deal may have either have been a rate/term refi (no cash out) or through SunTrust retail.

Did you ever find any lenders that can do these?
What states are the properties in?
I know Wachovia has a minimum loan requirement and that may not work.

I am looking for the same. Cash out, investment property, non-owner, no seasoning. Tenn.


Have you tried Citi? I know they do them.