All Forum Posts by: Jesse Gonzalez

@Mike H.

It depends on what your situation is, for some Freddie Mac is the more lenient, but for others it would be fannie mae.  

I haven't heard of any announcement regarding the increase of property limits, but wouldn't surprise me if they increase it in the future.  You have to remember that these agencies want to bring loans in the door and if business drops off and they see an opportunity to increase the lending base they will do it.  Rumors are always out there though so I don't pay much attention until the announcement is made.  

@Mike H.

You are absolutely incorrect, you can do a cash out refinance on a non owner occupied property if you have 6 or less properties financed.  This is a conventional loan, not fannie mae, but freddie mac. 

@Brian Higa The LLC is not an issue as long as the borrower's have joint or individual ownership of 100%. LLC is fine with fannie and delayed financing. i'm in california and licensed to help you in this state. Did you also know that freddie mac allows cash out refinances on non owner occupied property up to 6 financed properties? I don't know how many other financed property you have, but that may be an option. I have lenders that can do this loan.

For this refinance transaction, the borrower(s) must meet Fannie Mae’s borrower eligibility requirements as described in B2-2-01, General Borrower Eligibility Requirements. The borrower(s) may have initially purchased the property as one of the following:

ownership of 100%.

I don't know any brokers in your area, but you are correct per the multiple financed property question.  Also, just because the units are condos does not preclude you from performing a cash out refinance.  Just keep looking for a broker that is willing to put in the leg work.  Ask them if they have lenders that underwrite to fannie mae guidelines with no additional overlays.  That's the type of lender you will need.  

Applying the Multiple Financed Property Policy to DU Loan Casefiles

If the borrower is financing a second home or investment property that is underwritten through DU(Fannie Mae underwriting engine), the maximum number of financed properties the borrower can have is ten. If the borrower will have one to six financed properties, Fannie Mae's standard eligibility policies apply (for example, LTV ratios and minimum credit scores).

@Nicholas Duncan

You would probably be better served calling a mortgage broker, somebody who has access to multiple lenders, and that way they can pose your scenario to each lender in a way that they understand and you'll get a better chance of somebody doing the loan and giving you a legitimate answer.

You can use 75% of the rental income that the multi unit will generate as income to offset the debt to income ratios.  The guidelines are pretty straightforward regarding that.  I don't know anything more about your situation, but I've done loans for people who do not have employment, but do have rental income.  The market rents would be determined by the appraiser, but you should know what those would be anyways so you can run the numbers yourself. 

I'm not a tax professional and not giving you tax advice.  

You're saying that they will be on title, so they will own the property with you.  Are they listed as buyers on the purchase contract?  They can wire the funds directly to the escrow company and that way it will not have gone through your account, but be furnished as funds for downpayment and closing costs. 

One thing to consider is a VA construction to perm loan, only able to be used on SFR's though. 0% down on that one and you can purchase the land and finance the construction costs all in one loan that converts to a permanent VA loan automatically after construction is completed.

You just need to run the numbers on refinancing into a loan that does not carry MI.  I'm happy to help you analyze, but need the details of existing loan, current balance, original balance, rate, payment, date of origination, current value.  

Secondly, the minimum down payment if you're not VA or USDA is a conventional loan at 97% loan to value. That would be a straightforward fannie mae loan. The property would need to be elgibile for fannie mae financing, the reason I say that is because you reference a cabin and I don't know what a "cabin" is to you. Assuming the property is eligible you should be fine with a 97% ltv loan.

I often broker construction to permanent loans(however not in your state), and it is a FHA one time construction to permanent loan that will finance the purchase of the lot and the construction costs, then automatically turn into your permanent loan with no second appraisal required. You can use the existing land equity as part of the cash contribution which is a minimum of 3.5%. So, 300k total you could buy the land and finance the construction costs in the same loan for $10,500 plus title/escrow, lenders fees, etc. Also, the interest on the construction loan is built in during the term of the construction period so you don't have to pay monthly carrying costs. So, that's a way that you could do the deal with a minimum cash contribution.