If it's a standard conventional loan, they might prohibit a 2nd mortgage behind it.Even if allowed, the bank will definitely look into total LTV, DTI, credit, cash reserves, etc to make sure the deal makes sense.I did it once in the past.

Today's guidelines prohibit a cash out refi with individuals with 5 or more Fannie Mae loans unless done in the first 6 months after purchasing the property.

Any direct or indirect transaction between the plan and a disqualified party is considered a prohibited self-dealing transaction and is catastrophic to your IRA and your pocket book.Disqualified parties include:The IRA account holderTheir spouseLineal antecedents - parents, grandparents, etcLineal descendants - children, grandchildren, etcThe spouse of a descendantAn entity like a business or trust where one or more of the above have controlling interest through equity or decision making power.Family members not on the above list are not disqualified.  

Sadly, many throw that opportunity away and leave their IRA in some under-performing portfolio of paper assets simply because they see or hear one thing they do not like about the IRS restrictions that come with these tax-sheltered savings vehicles - such as UBTI or the prohibitions against sweat equity.  

But I've read on Bigger Pockets about Texas having very strict regulations prohibiting cash out or HELOC’s on investment properties, and a couple of lenders I’ve spoken with have said the same.  

I still stand by my assertion that you have no legal prohibition from offering someone money.

Doreen, here's a quote from an article last September about Sedona and STRs: "...Senate Bill 1350, which allowed short-term vacation rentals throughout the state in 2016 and prohibited cities and counties from regulating them.

If you prohibit landlords from raising rent to markets you will not maintain the supply of affordable housing; you will reduce the supply of affordable housing through condo conversions. 

Fannie Mae does not have a rule prohibiting having 2 at the same time.2.

I've spoken with them indepth regarding additional activities like sleding and bicycles...and it kind of goes like " if its not expressly prohibited in the policy we cover it...we ask you to provide helmets, life jackets Yada yada."