BRRRR cash-out refi hiccup

[Derek Sperzel]

I recently began interviewing local credit unions after learning they require lower or no seasoning period, versus a traditional lender, for a cash-out refi on investment properties.  The issue I am finding is that they will only loan against the amount I paid for the property (purchase price + rehab cost), and not the appraised value.  This is my first time attempting to work with a credit union and I would like to know if this is standard practice?

I can always go back to the traditional lender and get a loan based on appraised value, but they require a 6 month seasoning period.  I originally started speaking with credit unions thinking they could help my money grow faster, and therefore allow my business to scale faster.  

[Chris Mason]

Originally posted by @Derek Sperzel:

I recently began interviewing local credit unions after learning they require lower or no seasoning period, versus a traditional lender, for a cash-out refi on investment properties.  The issue I am finding is that they will only loan against the amount I paid for the property (purchase price + rehab cost), and not the appraised value.  This is my first time attempting to work with a credit union and I would like to know if this is standard practice?

I can always go back to the traditional lender and get a loan based on appraised value, but they require a 6 month seasoning period.  I originally started speaking with credit unions thinking they could help my money grow faster, and therefore allow my business to scale faster.  

 It's actually not a CU v traditional difference you are seeing... you're being told standard Fannie requirements. The 6 month wait is a Fannie requirement for cash out refinances. The 6 month wait is waived on an exception basis for delayed financing. Hence "delayed financing exception."