When you buy an investment property below market value & rehab using a line of credit, and then refinance (cash out) it to payoff the line of credit (80& ltv max), is there a seasoning requirement for using the ARV appraisal?
There seems to be a lot of confusion on this. Different conforming lenders tell me different things. The latest I heard was “FNMA use to have a seasoning requirement, but now they don’t.” Can anyone shed some light on this please?
Thanks
Damon
You need to document all the rehab work that you have done to the property. If you can show why the value increased, there should not be any seasoning issues.
Every bank has their own seasoning requirements with some requiring nothing in the way of seasoning. You should be fine. Just find a good broker who can take you the right direction.
Shaun and Mark,
Thanks both for your responses.
Mark,
Here’s part of the issue - the lenders that tell me they have a seasoning requirement say they are following FNMA guidelines.
One of the guys that told me this has been in business for 15+ years so you’d think he’d know.
Perhaps the question should be - does FNMA have have any seasoning requirements in their guidelines?
Thanks again,
Damon
yes, fannie mae and freddie mac loans are more strict in their seasoning guidelines. They definitely offer good rates, but your loans probably need to be run through different programs. Every bank draws their own guidelines (and although similar they vary somewhat) and some have very loose seasoning guidelines.