August 26th, 2010 4:34 PM by Eric Fang
Q: I am doing a cash-out loan with agent agent, but the loan was denied. I have more than 4 properties. But I read your blog,I rememeber you said it was ok. Could you please explain.
A: For the mortgage industry, if the loan will be sold to GSEs(Fannie Mae or Freddie Mac), then those loans will have to follow Fannie Mae guideline(Freddie Mac similar).Sometimes, we call those guideline as seller's guide.We will have to follow those guidelines in order to sellthe loan to the investors in the future.
So according to the guideline, if you have more than 4 financed properties, you can not do a cash-out on the rental property. But you are ok to cash-out on the primary.
So in order to cash-out your loan, you have to find a lender,a portfolio lender who is going to keep your loan. And I refermy clients to those banks, they got those loans refinanced, and with no closing cost for those rentals.