Need clarification on 6-month waiting/seasoning requirement

[Jonathan Viray]

Hey everyone,

I'm a new investor looking to do a cash-out refinance on a rental property in San Antonio. My parents have owned this house since 2008. If I'm added to the title together with my parents as joint owners, does the 6-month waiting period for cash-out refis still apply if all three of our names will be on the new mortgage??

The Fannie Mae website here (third bullet point) says that "the property must have been purchased (or acquired) by at least one borrower no less than six months prior to the disbursement date of the new mortgage loan..." Maybe I'm interpreting it wrong, but it sounds like if there's more than one borrower, only one of them needs to meet the seasoning requirement. In my case, both my parents would meet the requirement.

Some addtl background: The house still has a remaining loan balance around $42k. It's worth about $425k, and I'm looking to use the equity to purchase a duplex that I can house hack. I've been managing the property for the last five years. Current lease ends next year (June 2023). My parents are retired and not making much income. They may still be able to qualify for a cash-out on their own, but I'm assuming with my income we might be able to get more favorable terms.

Any help clarifying this rule for me would be greatly appreciated. Thanks!

Jonathan

[Kevin Luttrell]

You are correct, if all 3 of you will be on the mortgage and title then there is no waiting period. 6 month wait would only apply if you deeded the property from your parents' name to your name.