New law restricting local banks from funding loans for properties consisting of less than 5 units

[Jeff Kennedy]

Has anyone heard of this?

I have a duplex in Northern California. We have owned it for two years. We now have quite a bit of equity and I'm looking to refinance and pull some cash out for another deal. The property is financed at a local bank with a portfolio loan (because of some odd zoning that prevented us from using a conventional mortgage). I have a good relationship with the bank and we started the refi process a few weeks ago.

I just received a call today from the banker and he said that we may have a problem. He told me that there is a new law that may prevent them from doing this refinance because it is under 5 units. Our existing mortgage is with this same local bank. Does anyone know about this new law/rule??