Lender wants appraisal of rents...on a rented house

[Bonnie Low]

Well, this is a new one for us. We're in the process of a BRRRR. We're doing a cash out refi from our hard money loan into a conventional 30 yr fixed. The property has been rented since December of 2020 and we have the tenant in there with a 1 year lease. It is managed by a professional property management company in our area. The house itself was already appraised for about what we expected it to. But now the lender is requiring a "rent appraisal" evidently to determine how much it should rent for. Why would they require this when we can show them a 1 yr lease and receipts for what it is actually renting for?? We're confident it's in line with the market so I'm more annoyed than concerned, but it feels like just yet another delay tactic and hurdle. Can any lenders out there explain what this is about?

[Jon Kelly]

@Bonnie Low similar to what Patrick said, I suspect it could be the appraisal's fair market rent was either not included or the range was too wide for the lender's standards. 

Although you have a 1-year lease in place, the lender is committing to you for 15-30 years. It's certainly an annoyance and delays the process for 2-3 weeks. I would ask the lender why and how this happened. If it's related to an issue from the first appraisal I would ask the lender to waive the fees on the 2nd appraisal. 

It's always good to network with other lenders in case you need them!