Using Primary mortgage for Flip

[Wei Huang]

Hi All, 

I'm going in on a property in NY that needs full rehab but it's in a liveable condition that can pass inspection. I spoke with a broker and chase mortgage rep regarding financing this under primary convention loan (20% down) and got two separate responses. 

1. broker says I must hold the property for 1 year before I can flip it using conventional 20% or do 30% investment loan and hold for 6 months

2. chase is telling me I can flip whenever I want to but recommends 3-6 for the deed to fully register (I have doubts this is true and might be considered mortgage fraud)

My question is what are the actual legal requirements for using a primary mortgage? Additionally, my schedule for renov is about 3 months with my contractor and estimating another 1-2 months to find a buyer so it will sell most likely after 4-6 mortgage payments. I plan on doing 1031 with 2 qualifying properties. 

Below are the deal numbers:

Purchase $995K contract + $25K cash

Down: $227K (bring the finance amount to the max threshold for non-jumbo ($768K) to save on closing

Closing: ~$15K

Renov $215K

Resale estimate $1.8M

Thanks