Convential Loan After Rehab

[Richard Mann]

Scenario: Hard money loan on a buy and hold property. Rehab and then refinance at 70% of the appraised value.

Will the average bank loan 70% of the appraised value without any money down on the refinance?

Thanks

Rick

[Michael Seeker]

I've talked to several banks about this same scenario recently. What I've generally found is that the best underwriting guidelines will allow for 70 to 75% LTV based on the appraised value with minimum of 6 months seasoning from time of the hard money loan to the initial loan application. If it is 1-2 units, they will allow up to 75% LTV cashout financing. If it is 3-4 units, they will allow up to 70% LTV cashout financing.

You may have to ask around to several lenders and/or financing sources to find somebody that has these underwriting guidelines. BB&T is a national bank that will allow it though.

-Michael