Refinancing out of FHA, 203k loan

[Adam Juodis]

I'm thinking about doing a FHA, 203k(rehab loan) on a 4-plex unit. The initial numbers after the rehab work out, but they're not great. I'm willing to go for that since the property is in a great area. My mortgage lender told me i'd be paying about 0.3% extra interest on the loan for taking out the rehab dollars. The monthly PMI would be around $300 for the property+203k loan amount.

The PMI assessed from the 203k rehab budget would cost me around $25 a month, and the addition 0.3% would cost about $100 per month. When would I be able to refinance to remove the PMI payments(At 20% equity). Is there anyway I can remove the PMI that is based off the 203k loan amount? Thanks!

[Christopher Rutherford]

@Adam Juodis I did a refi out of my 203k as soon as the last disbursement was made to my contractor. It worked out great. I didn't hit 20% equity but I did a refi into a physician loan so it didn't matter. I would highly recommend doing the refi if you are planning a longer term rental. Last I heard you are not able to remove the PMI off of FHA loans anymore even when you have 20% equity.