How do I get past the 6-12 month Seasoning Period

Question

Newbie here. I just recenlty rehabbed a home and was ready to rent out but was told I could not refinance until at least 6 months. Is there a work aroud for this? What are other doing to avoid high percentage rates from Hard lenders? Please help!

Richard Loniewski · Answer

We have 3 month seasoning, there are a few companies that do both loans, so if you do the rehab with them then refi with them there is no seasoning.

Ron Brady · Answer

This may not help with this purchase, but it can in the future. We've used this approach several times.How To: Avoid Seasoning when Refinancing (biggerpockets.com)

Gustan Cho · Answer

There's no 6 months seasoning requirement if you go with the original purchase price. Lending Network LLC does this . https://www.lendingnetwork.org. Dianne Burnett

John O'Leary · Answer

There are still no seasoning options for Refi's with documented rehab. Check your DM

Gustan Cho · Answer

You may want to explore portfolio non-profit loan. Depends on the investor

Daniel Christopher · Answer

You could try a DSCR loan. Typical LTV restrictions are as followed:

✅Cash Out Refinance 70% of ARV (3-6 months) or 75% of ARV (6+ months)

✅Rate & Term Refinance 75% of ARV (3-6 months) or 80% of ARV (6+ months)

🚫No W2's, Tax Returns, or personal Debt-to-Income Ratio required.

Julio Burgos · Answer

Welcome to the world of real estate investing! Dealing with seasoning periods before refinancing can indeed be a challenge. Many investors face similar situations. One approach you might consider is exploring different loan options, such as DSCR loans. These loans often have shorter seasoning periods, sometimes as little as 3 months. This could provide you with more flexibility while avoiding high percentage rates from hard lenders. Remember, it's essential to find the right financing strategy that aligns with your investment goals. Feel free to DM if you'd like to delve into more details – happy to help!

Brittany Minocchi · Answer

You can refinance prior to 6 months in some cases, it just depends on which lender you go through, which loan program you're using and their seasoning requirement. Conventional financing increased the requirement from 6 to 12 months, but there are other programs out there that only require 90 days. Some lenders base the LTV on your purchase price + closing costs, others will use the new appraised value. I always recommend keeping a great paper trail (before/after pics, invoices, receipts, etc) when it comes to rehabs - some lenders will be more lenient on the seasoning requirements and whether they use purchase price/appraised value if you can evidence the value add. Once your rehab is completed and you've got the property rented out, a DSCR loan would be a great option for you to get around the 6 month seasoning requirement. Hope fully that helps - if you have any questions, feel free to connect.

Doug Smith · Answer

You can refinance it, lenders just aren't going to let you use the appraised value for LTV calculation purposes. They are going to use your cost basis. After 6 months of "seasoning", then most DSCR lenders will allow you to use the appraised value.

How do I get past the 6-12 month Seasoning Period

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