Credit unions that do lines of credit on investment properties in Utah?

Question

Can anyone recommend a local credit union that does HELOC's with attractive rates up to 80% LTV, and will underwrite HELOCs on investment property as well as primary residence?Thanks!

Taylor Chiu · Answer

@Jeff Rappaport Maybe you've already heard about this option, but AFCU will do 80% ltv heloc on investment properties. Variable interest rate, best you'll get is around 5% rate these days. Minimum monthly payment is 1.25% of outstanding balance or $50, whatever is greater. That min % is a kicker, but if you can pay it off quick, it's not too bad. That's the highest percentage investment property HELOC I'm seeing in Utah.

PenFed will also work in utah, and they do 80% as well. But they will only work with you on investment properties if you have 3 or less properties total.

Jeff Rappaport · Answer

Aaron,

Unfortunately, I cannot give you any great advice on lenders.  I wholesale a lot of multi family properties in Idaho and have checked with many lenders nationwide.  The vast majority of them are only going to 70-75% LTV even on 2-4 units.  I would suggest the Credit Unions like Mountain America and Goldenwest.  Maybe even Washington Federal.    Mountain America had a program of 90% LTV no seasoning refinance.   They just took it way in the last few weeks.  I  don't know that a heloc will be any different.  Lenders have been really tightening up.  I did find an interesting lender that will do 80% LTV on residential (2-4 units) and commercial (5 units and up).  His rate is not the best (6.25%) and charges 2 points.  It is basically a stated income loan.  Credit score about 650 and the loan amount has to be $300K or more.  However, he will allow you to bundle several properties together to get to that amount.  Again, I don't think he will do helocs.  If you find anyone that is doing 80%LTV will you please let me know. Thanks!

Brian H. · Answer

@Aaron Knoll I don't have a credit union reference for you but I do like working with Zions. They will bundle all of your rentals into one HELOC with no upfront costs and a low variable rate. I believe they will do 65% of the appraised value.

@Jeff Rappaport Please add me to your buyers list. I like to buy in Idaho.

Aaron Knoll · Answer

I wonder if a lot of credit unions are suddenly bearish about 2016, and are trying to discourage investors from tapping out equity?

Strange that they'll let you tap out 100% of your equity in your primary home to buy a worthless RV, but not 80% in your investment property to buy another cash-flowing investment property with solid numbers!

Don Spafford · Answer

@Brent Crosby Sorry, I made an error, it was a 75% ltv. The people I first spoke with said I should be able to do 80% which I was excited for but in the end it was only 75%. But you can speak with anyone there. The initial application can be done online. The online application has some issues, I had to call in to help it go through. Just go to penfed.org and either call the number there or fill out the app. Like any credit union you have to be a member first so you'll need to create an account with a $5 deposit. I didn't work with anyone specific since there were multiple departments that went through each phase. But they had great communication, they called often to let me know where we were at or what they were waiting on. The biggest holdup was the appraisal since I had to coordinate it with my tenants and then I had to have the appraiser go back because the first one came back too low so I gave them better comps and they redid it and got a higher valuation. Still lower than what I think it should be but good enough to use. Hopefully you'll get a better appraiser.

Brent Crosby · Answer

@Don Spafford would you send me your contact there?

Brent Crosby · Answer

Thanks @Don Spafford!!! I’ll take a look!

Don Spafford · Answer

@Brent Crosby Pentagon Federal Credit Union does helocs on 4 plexes up to 80% ltv. I just got one recently. You will probably need to pay for an appraisal unless they can get an estimate online but with a MF probably not. The only downside is that if you have more than one investment property you can't get it. So you can only have your primary and one rental to get it.

Luckily for me that is exactly what I had so I was able to get it and now I can use it to purchase more. Plus they give you the option of a loan payback or do interest only for 10 years. I chose the interest only. My plan is to just use it and then as I get my cash flows instead of holding them in a bank, just put it into the heloc so it gets paid back quickly and that cash is still available to reuse during the next 10 years to keep recycling it.

But yes, I called around to many different banks and credit unions, this was the best option I could find. They are not "local" but will lend to just about every state. There was another that will do a heloc on rentals but only SFR. Everyone else would just do a refi.

Brent Crosby · Answer

Just wanted to revive this thread. I was able to do a HELOC on one property with America First, but was unable to do a line of credit on another property because it has a bizarre commerical zoning. Its a 4 plex in Salt Lake County. I've reached out to a number of commercial lenders but no one will touch it because it has a mortgage. The property has at least 200k of equity that I'm unable to tap. I've been told by commercial lenders my best option is to find a smaller bank for a residential line of credit that will overlook the zoning, but have had no success. I'd prefer not to take the zoning off as it makes the property more valuable given the property location.  If anyone has a good contact that they think might take a look please let me know.

Eric Gardiner · Answer

I recently have been going through the HELOC process with America First Credit Union. They would do 80% on investment but I had to pay for the appraisal and they wanted me to show a lot of income.

Credit unions that do lines of credit on investment properties in Utah?

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