Market Information

Loan Guideline Change Hurts Real Estate Investors

Published Saturday, January 22, 2011
By Kevin Amolsch

One January 18, 2011 Freddie Mac announced some changes to guidelines for refinance mortgages.  These changes will take effect on May 1, 2011.  The one that stands out and that will hurt investors is the rate and term refinance will now require title seasoning of 120 days.  The 120 days is from note date to note date meaning from the time you take out the original loan until you close on the refinance.   As of now this is only Freddie Mac so any loans purchased by Fannie Mae will not be impacted by this change at this point.

Much of Pine Financial Group’s business lately has been hard money loans to buy and rehab property that will eventually be refinanced and retained as rental property.  This is a great strategy because it allows real estate investors the opportunity to buy cash flowing rental property that has built in equity for little or no down payment.

The hard money purchase with a conventional refinance program will still be a powerful and effective strategy but you may need to hold the property for 4 months between loans.

Although simple this can be a confusing strategy so please contact our office if you are interested in learning how you can buy rental property for no down payments.