DELAYED FINANCING EXCEPTION
Borrowers who purchased an Investment Property or Second Home within the past six months are eligible for a cash-out refinance. The new loan amount can be no more than the actual documented amount of the borrower’s initial investment (Purchase Price on HUD Settlement Statement) in purchasing the property plus the financing of closing costs, prepaid fees, and points.
- The purchase transaction cannot be an arms-length transaction.
- The transaction is documented by the HUD-1, which confirms that no mortgage financing was used to obtain the subject property.
- The sources of funds for the purchase transaction are documented (such as, bank statements, personal loan documents, HELOC on another property). All other cash-out refinance eligibility requirements are met and cash-out pricing is applied.
- Proof of the source of funds are not required during the 6 – 12 months after the initial purchase transaction.
- 1-unit second home or investment: 75% max Loan to Value
- 2-4 unit second home or investment: 70% max Loan to Value
- Loan to values will vary depending on the number of financed properties the borrowers owns, 1 to 6 financed properties 75% of the appraised value, 7 to 10 financed properties 70% of the appraised value.
- Loan Amount can not exceed the original purchase price.
- 620 Credit Scores under 4 loans and 720 for the 5 -10 loans required
- All US Citizens, Permanent Resident Aliens, and Non-Permanent Resident Aliens –(Social Security Number required, no TIN numbers)
- No More Than 10 Loans per Borrower
- 30, 15 & 10 Year Fixed Rates Available
- No Balloon Payment or Pre-Payment Penalties
- In-House – Processing, Underwriting, Closing & Funding.
- Underwritten In accordance to Fannie Mae Guidelines Only
*The borrower may still complete the funding of the refinance after first 6 months as long as they have no more than 3 financed properties currently.
Note: The preliminary title search or report must not reflect any existing liens on the subject property. If the source of funds to acquire the property was an unsecured loan or HELOC (secured by another property), the new HUD-1 must reflect that source being paid off with the proceeds of the new refinance transaction. Warrantable Condos and PUD are Eligible for this program.