Property Value / Delayed Financing Exemption / Cash Out Refi

[Edit B.]

I've read Fannie Mae guideline on this, but am recently confused after speaking with a few lenders. According to the DFE on Cash Out Refi, if a property is purchased in cash;

1.) 6 month seasoning period is not required

2.) 75% LTV or lower is applicable

3.) Value in LTV is based on appraised value

4.) Total cannot exceed purchase plus closing costs

Both lenders I spoke with today are clear on 1 & 2 but when it comes to 3 they're are doing whichever is lower of appraisal and purchase price. I dont see this on the Fannie Mae guideline- anyone else dealing with this or know why they are doing it this way?

[Jorge Ruiz]

@Edit B. you are correct about #3 in your post. Sorry I can’t shed some light as to why that is. But here is something I learned from @Andrew Postell and if my inspection goes as planned on a duplex I have an accepted offfer I will be executing the following strategy. This strategy here eliminates #3 in your post. Here is what Andrew wrote on another post:

HOW TO PROPERLY STRUCTURE BUYING A HOME WITH CASH

Create an LLC and have the LLC lend you a mortgage on the property you arereceiving.The reason why this works is because instead of you needing cash or receiving a cash out loan, we are now refinancing a loan – your loan. There no reason to wait any time or have any "whichever is lower" rule come into play. We are just refinancing a loan. Here's how it works:You create an LLC. You buy a home. Your LLC gives you a loan for the home. You file the deed for that loan at the county courthouse. You use the money from the LLC to buy and fix up the property. Once the property is completed, your conventional lender comes to refinance the loan. Your conventional lender runs title and sees there is a loan.Your conventional lender refinances you into a new loan, and cuts a check to your LLC in the amount of 75% of the value. Please don't confuse this 75% with a "cash out" amount. The non-cash out LTV on a refinance is also 75%. We are refinancing a mortgage. Your LLC's mortgage. Essentially your LLC has become the bank/hard money lender/etc. However you want to think about it. You get to set the interest rate (it can be 0%) and you get your investment amount back sooner. Some things to think of: To file a deed at the county courthouse is $100-$150 in cost (depending on which county)And you want that note to be pretty close to 70% of the ARV for the property if you don't want to bring any money to closing. 70% will allow you to roll in your closing costs. If you want it to be at 75% just keep in mind you would need to bring your closing costs out of your pocket to complete the refinance.