Cash-Out Refinance Seasoning Guidelines And Requirements On Home Loans

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Cash-Out Refinance Seasoning Guidelines And Requirements On Home Loans

This BLOG On Cash-Out Refinance Seasoning Guidelines And Requirements On Home Loans Was PUBLISHED On April 27th, 2019

Cash-Out Refinance Seasoning Requirements differs on the particular loan program.

  • There are various mandatory Cash-Out Refinance Seasoning Requirements depending on the individual loan program
  • For example, Cash-Out Refinance Seasoning on FHA and VA Streamline Refinance is a 6 month waiting period
  • For an FHA Cash-Out Refinance Seasoning Requirements, it is a one year waiting period
  • Fannie Mae and Freddie Mac require Cash-Out Refinance Seasoning requirements for six months for both cash-out refinance seasoning and rate and term

In this blog, we will discuss Cash-Out Refinance Seasoning Requirements on the various loan programs at Gustan Cho Associates at Loan Cabin Inc. Home buyers purchasing owner-occupant home cash will need a minimum of six months before they are able to do a cash-out refinance mortgage.

Fannie Mae Cash-Out Refinance Seasoning Requirements

Fannie Mae cash-out refinance seasoning guidelines require that the home buyer has closed the property for at least six months and have made six consecutive on-time payments. Fannie Mae Cash-Out Refinance Seasoning Guidelines are the same as a rate and term versus cash-out refinance mortgage. The waiting period for both types of conventional refinance mortgage program are both six months. This exception to the rule is made under the following circumstances:

  • If the subject home was a home that was inherited and/or legally obtained by inheritance, divorce, legal separation, through the separation of domestic partnership, and/or other legal means
  • If acquired by the above means of action, proper documentation is required 
  • The property could have been owned prior to closing by an inter vivos revocable trust.

Freddie Mac’s cash-out refinance seasoning policy has similar cash-out waiting period requirements to Fannie Mae on conventional loans. There is a six month waiting period to refinance a rate and term or cash-out conventional loan. Maximum loan to value on conventional loans is 80% on cash-out refinances. On rate and term refinances, private mortgage insurance (PMI) is required on any loan to value that is higher than 80% LTV on conventional loans.

HUD Cash-Out Refinance Seasoning Guidelines

HUD, the parent of FHA, will allow FHA Streamlines and/or FHA Rate and Term Refinance Mortgages after the borrower has closed on the subject property six months prior to and/or have made six monthly timely payments on their FHA Loan. Cash-Out Refinance Seasoning Requirements mandate a one-year waiting period after the initial closing and that the borrower has made 12 monthly on-time payments. HUD allows up to 85% Loan-To-Value on all cash-out refinances.

Cash-Out Refinance Seasoning Guidelines

Gustan Cho Associates Mortgage Group offers non-qm and alternative financing programs where there is no waiting period to do a cash-out refinance on investment property loans.

Investment properties can close under a Limited Limited Partnership (LLC) which is ideal if you need to do an IRS 1031 Tax-Free Exchange.

Refinancing After Bankruptcy And Housing Event

Government and Conventional Loans have a mandatory waiting period for a homeowner to do a refinance mortgage:

  • FHA and VA require a two year waiting period after Chapter 7 Bankruptcy discharge date
  • Borrowers can do both a rate and term and/or cash-out refinance mortgage during a Chapter 13 Repayment Plan with Trustee Approval
  • There is no waiting period to qualify for VA and FHA Loans after a Chapter 13 Bankruptcy discharge with both a purchase, refinance, and cash-out refinance mortgage
  • There is a three-year waiting period to qualify for a USDA Loan after a Chapter 7 Bankruptcy discharge date
  • There is a two year waiting period after foreclosure, deed in lieu of foreclosure, short sale on VA Loans
  • There is a three-year waiting period to qualify for FHA and USDA Loans after a foreclosure, deed in lieu of foreclosure, short sale
  • Fannie Mae and Freddie Mac require a 4 year waiting period after a Chapter 7 Bankruptcy discharge date
  • The waiting period is 2 years after Chapter 13 discharged date on conventional loans
  • The waiting period is four years after Chapter 13 dismissal date on conventional loans
  • There is a seven-year waiting period on conventional loans after a regular foreclosure

NON-QM Loans have no waiting period after bankruptcy, foreclosure, deed in lieu of foreclosure, short sale. There is no waiting period on non-qm loans after a homebuyer purchases home cash and want to do a cash-out refinance mortgage. For more information about this topic and/or other mortgage related questions, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com. We are available 7 days a week, evenings, weekends, and holidays.

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