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What are Fannnie Mae title seasoning requirements for cash out refinancing for investment property?

I am about to get title to a home as part of the disposition of a trust. I need to borrow against the home to (1) pay off siblings to equalizie shares and (2) remodel the home to make it a suitable rental property. I plan to borrow half of the appraised value of the home, so I will still have 50% equity in it. I am being told (by loan reps) that to get this type of mortgage (considered cash-back refinancing) on an investment property, that Fannie Mae requires that the tile must first be in my name for six months. This makes no sense to me, and it makes it impossible for me to remodel and rent the home out quickly. Does this sound correct? Are there any other options or some way to waive this seasoning requirement?

SSPINGARN's picture
SSPINGARN | Joined: April 30, 2009 12:02 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

there is a way around it. its called hard money very high rate and very high points but you can do it and do a regular refi after 6 months to get out of it with NO prepay penalty

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:47 | Post subject:

jveenstra's picture
jveenstra | Joined: November 10, 2008 09:03 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Fannie Mae section B2-1.2-04 states that an inherited property meets the Continuity of Obligation to be eligible for rate and term or cash out [url=http://www.mortgagefit.com/refinance.html]refinance[/url].
Lenders may have their own overlays. Just because Fannie Mae allows it does not mean ok with every lender.
Should be ok with Fannie Mae or Freddie Mac with some lenders.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I built a home this fall and the house was completed in 12/09 and a construction loan with a 4.1% rate was used with a 3/1 arm. I was told I could convert anytime during the 36 months to a 30 year fixed. When I talked to the bank yesterday they said recent legislation only allowed me to convert after 12 months of payments. Is this accurate and should or was it possible for them to notify me of this change prior to the actual date so I could convert to the 30 year fixed ? If we assume rate will increase over the next 6 mos, I am not able to convert now and get the better rate. Sound right ?

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:47 | Post subject:

jveenstra's picture
jveenstra | Joined: November 10, 2008 09:03 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I have never heard of legislation that could change existing loan documents.

You signed closing documents that state you could convert anytime or convert anytime in years 2 or 3.

Most convertible loans do not allow conversion in the first 12 months. Maybe there is no change in legislation. Maybe that is the way the original loan documents read. Read your NOTE. It provides the terms.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Can my company SELL property to me, individually, instead of waiting the seasoning time period for title to be changed.
thank you,
Jill Worsley

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smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jill!

Welcome to forums!

As far as I can understand the situation, your company will be able to sell you the property. However, it would be better if you could contact an attorney and take his opinion in this matter.

Feel free to ask if you've further queries.

Sussane

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My broker is telling me it is normal to take 2 mos to get a loan into underwriting and it is normal for an appraisal to take 10 days. This seems crazy to me since you can not lock your loan

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi archie,

It might take some time in order to underwrite the mortgage and appraisal. I think you should wait for sometime and check out if you can lock the rate. If the lender takes more time that what he has said, then you can think about cancelling the deal.

Thanks

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I'm refinancing with Chase, no closing cost and no income documentation.
With past refinance I didn't pay the first month after closing because with mortgage we pay at the end of the month, but this time is not the case, please let me know if this right.

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smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi alma!

Welcome to forums!

Things may be different with different lenders. You should contact Chase and check out whether or not you really need to pay the first month's payments. They will be the best to guide you in this matter.

Feel free to ask if you've further queries.

Sussane

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

investment property purchase for for cash in 03/2011 for 60,000 now they want 120,000 after some improvements. can this be done?

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:47 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I don't think this can be done. The improvements are more than the property value.

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jveenstra's picture
jveenstra | Joined: November 10, 2008 09:03 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

An appraisal determines the property value, not how much they bought it for.

If they bought a property in a distressed sale for $60,000, the actual property appraised value when they bought it could have been much higher. I am sure the value was higher than $60,000. If it was not, they would not have paid cash with the intent to sell quickly and make money.

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