LLC to Individual for conventional refi help?

Question

does anyone know the guild lines for a property I purchase under my llc, rehab, rent, and try to refi conventionally?

I know you're able to quit claim into our personal name but how long does the property need to be held to refinance?

I found something that said if under 24 months it's a max ltv of 50%. Is this correct?  If you could copy the link from Fannie or Freddie I'd appreciate it.

Btw this would be my 5th property.

Percy N. · Answer

@Nick Versetto, most portfolio lenders will lend to a LLC (they don't have to follow Fannie or Freddie guidelines) and will give you 80-90% LTC (loan to cost including rehab) before the property is seasoned for a year.

They are also not restricted to the 4 property rule and will introduce you to their commercial loan side at the right time.

Worth making a few calls.

Jeff W. · Answer

Bringing this back from the dead, but what about title seasoning from llc to individual when doing a conventional renovation loan?  I believe renovation loans are not considered cash out refinances.

Nick Versetto · Answer

@Percy N. I've made a couple contacts and am going to reach out.  Thanks.

Nick Versetto · Answer

I haven't.  I'm just looking for refinance options out of hard money for now.

Nick Versetto · Answer

Thanks Albert.  I'll be at about 70% ltv depending on the appraisal.

That's what I was looking for. 6 months sucks to hold a home that I used hard money to obtain but worth it for a fixed 30 yr.

Albert Bui · Answer

You may not need higher LTV it depends on what loan amount you're trying to refinance and what the current market value is right now.

If you're lower than 50% LTV anyway it wont matter as much. If you're higher then yes you may want to concern yourself with something called "continuity of obligation." This sets the rules for the LTV's when refinancing on property through fannie/freddie.

Freddie goes up to 6 financed properties now (as of 10/26/15 or after) and fannie up to 10 as always.

Albert Bui · Answer

To answer your question quickly, no you will not be restricted to 50% LTV when refinancing the current debt as you transfer title from your LLC into your name because you own the LLC 100% (min 25% ownership is needed) so as long as your LLC has held consecutive ownership in this property for a min of 6 months prior to the disbursement of the new loan (AKA prior to funding). So this means you can buy the said property in Sept 1st 2015 as an example and funding by the  6 month + 1 day mark or march 2nd 2016 or later.

The question is how long have you held this property in your LLC so far?

I also assume this "refi," you speak of is a rate/term refinance and not a cash out refinance right?

Darren Eady · Answer

Fannie Mae or Freddie Mac do not have seasoning guidelines on cash out refinances on rentals, but many banks set their own guidelines.  You could potentially pull out cash without seasoning, but my experience is that most banks require a full year before they will allow a cash out loan.  Banks will however allow for a rate and term refinance (no cash out, only paying off the existing lien) almost always without a seasoning requirement.

Nick Versetto · Answer

I'm not asking for cash out. I'm asking for a link to the guilds lines that might help get a higher ltv than 50%.  Thanks for the reply.

LLC to Individual for conventional refi help?

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