Cash-Out Refinance Seasoning Guidelines And Requirements On Home Loans

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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. 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 Seasoning Guidelines

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 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 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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