What You Need To Know About Cash Reserves!

Acceptable Sources of Reserves; Cash and assets that are liquid or near liquid

• Checking or savings accounts
• Investments in stocks, bonds, mutual funds, certificates of deposit, money markets funds and trust accounts
• The amount vested in retirement savings accounts
• Cash value of a vested life insurance policy

  Certain assets must be “discounted” when used for reserves. Terms and conditions of liquidation may be required depending on the asset used for reserves. 

  Assets Requiring Liquidation
  The following may be counted as cash assets at 100% of verified liquidated amounts:
  

  • Cash value of life insurance
    
  • Publically traded stocks
    
  • Bonds
    
  • Mutual Funds
    
  • U.S. Government Securities
    
  • Savings Bonds
    
  • Retirement Funds 
    

• Gift Funds - Primary Residence and Second Home ONLY

Cash Reserves Required For Other Properties Owned by Investor.

Cash Reserve Requirements;

6 months PITI is required on subject property.

If you have 1-4 financed properties than it is now 2% of all unpaid principle balances.

If you have 5-6 financed properties than it is now 4% of all unpaid principle balances.

If you have 7-10 financed properties than it is now 6% of all unpaid principle balances.

Money must be in account for 60 days or sourced. A HELOC can be used as down payment, but not as cash reserves.

This information is accurate as of the time of posting. Please also verify the accuracy of this information at the time you are considering these options as guidelines change.