Refinancing a Seller Financed Deal - Seasoning Time

[Milton Durstine]

Hello Everyone!

Last October (October '21) I closed on a seller financed deal consisting of a triplex, duplex, and garage/ADU. So 6 total apartments. It needed quite a bit of work. Rehab is just about to finish with 4/6 apartments currently under lease. I reached out to my preferred bank to start planning for the refinance. I thought everything was moving forward perfectly until the bank called and said it's their policy that seller financed deals have a 2 year seasoning period. I'd prefer to use this bank since they've treated me well in the past but waiting 15 or so more months to close the refinance has me a bit disheartened.

Is a 2 year seasoning period typically required to refinance a seller financed deal?

[Upen Patel]

@Milton Durstine Are these on individual parcels/tax ID? This would determine the type of loan you can use.

Does each property have its individual loan? Or is it a single loan that collateralizes all the properties? This would determine if it is classified as a rate and term refi or a cash-out refi (even if you are not getting any cash in hand).

Since you have owned the property for more then 6 months you certainly should be able to do a refi. The 2 yr seasoning requirement is that lenders internal overlay.

Hope this helps.