It's my understanding that cash out refis are hard to come by.You may need to get private money, obtain a huge second or refi it and then do a no cash out refi later to get where you want to be.Only two ways to get equity out, sell the property or borrow it out, borrowing has tax advantages and does limit liability in a round about way.I'd consider your cost of money and use of funds considering paying down principal on a home that was to be used for a 7 year period, you could probably do much better using it in other ways.

This is not limited to the “small guys” either.

I was making really good profits on every flip (as high as $50k on one) but I was severely limited on the number of projects I could do.

Available add on services, monthly maintenance inspections, monthly market reportsRepair limits without notification, what is your limit?

There are now servicing requirements, limits on balloons, and qualifying the buyer's ability to pay.  

-StevenI believe Steven meant FLP which stands for Family Limited Partnership.

If you bought the home today and needed to sell it a year or two later, you'd have a home that will have depreciated along with a shortage of available buyers due to limited financing options.

I've just grown skeptical of the Fannie process so I've moved on to non-Fannie deals.I believe the Fannie deals are going at a premium to account for the special financing terms (lower LTV ratios and ability to finance more properties than the usual Fannie limit).

I also think that this does probably limit people who do not like dogs from applying.This summer we had a unit open and this nice couple came to see it.

Dana is correct, Fannie, Freddie, USDA, FHA and VA will assume to be QM following those respective guidelines.Ratios can still go to 50% with compensating factors and there are exemptions for regulated lenders where the assumption will be made that a mortgage falls in the QM guidelines or they may originate a high risk mortgage with limiting loan conditions.