Seasoning for Cash Out Refinance on a Hard Money Loan

[Gedaliah Fineman]

I was informed of a new regulation requiring 12 months of seasoning in certain scenarios and wanted to find out if this would apply if the primary loan of an investment property was a hard money one. It seems to not apply to a HELOC. Please see below and thanks in advance!

[Issac San Miguel]

I believe this only applies to fannie/freddie loans.

[Jay Hurst]

Quote from @Gedaliah Fineman:

I was informed of a new regulation requiring 12 months of seasoning in certain scenarios and wanted to find out if this would apply if the primary loan of an investment property was a hard money one. It seems to not apply to a HELOC. Please see below and thanks in advance!

 @Gedaliah Fineman  The 12 month seasoning DOES come into effect if the property was purchased with a hard money loan.  The important thing to understand is that this is only for cash out loans meaning you can refi what is owed with no wait period. That is called a rate/term refi. Or, if you can get a bridge loan to pull the cash out with a non-conventional loan like we have been doing for years, then turn around and refi right away with the conventional loan which has no seasoning because it is a rate/term refi.

[Luis Somoza]

Quote from @Gedaliah Fineman:

I was informed of a new regulation requiring 12 months of seasoning in certain scenarios and wanted to find out if this would apply if the primary loan of an investment property was a hard money one. It seems to not apply to a HELOC. Please see below and thanks in advance!

Some non-qm lenders would be ok with less than 12 months seasoning. Best way to find out is contact a mortgage broker that works with lenders that offer these loans and is licensed in the state in question,

[Simmy Ahluwalia]

That's correct for Agency financing. With private DSCR lenders, you're looking at 3 months title seasoning.

[Eliott Elias]

Is DSCR going to follow?

[Kevin Luttrell]

@Eliott Elias not likely. DSCR lenders will mostly be happy to fill the gap left by the agencies.