Refi out of HML

I have two HML that I am in the process of refinancing by the end of the month. I was just informed that I need them both to be rented before the closing. I have one already rented but the second one is a duplex I just got this month and do not have a tenant yet. Is this common? We were supposed to close in the next couple of days and this just jumped out of no where…

That sounds like a lender specific issue. Are you closing on both at the same time or one after the other? If you are closing on one at a time then the lender has to count the debt from the first property while underwriting the second property. Close on the property that is rented first and provide a lease to the lender on the second and you should be fine. Typically lenders will allow you to use a portion of the rent that is listed on the operating income statement part of the appraisal as income.

I’m curious about this subject too. I worry that I will not be able to refi out of the HML. Then be stuck into a high interest rate. It could mean $500 more/mo. in mortgage pmts. :shocked I wish I had some assurrance about this but I still have some more info gathering to do. My gut tells me it can be done.

The vast majority of lenders want properties to either cash flow or have the committment towards cash flow (in the form of lease) when they consider refinancing you.

This is SOP in today’s market.


Scott Miller