The seasoning period is one of the more frustrating issues for experienced investors, but what exactly does that mean? The seasoning period Is the time that lenders require to pass between the purchase of real estate, and the ability to recognize and use the improved value of a property. Most lenders require at least six months to pass from the date of purchase before they will recognize the improved value of an acquired property. Some lender seasoning periods can be as long as a year! This creates a challenge for any investor wishing to get credit for equity of an improved property.
If an investor has improved the value of a property, and that is proven and documented via an appraisal, why do lenders require that equity to be locked inside the house for a period of time? Fortunately, there is a solution. Hurst Lending has options that will allow you to access your hard-earned equity right away. That way you can use that equity to buy another property by using our non-seasoning cash out loans. If a solid appraisal shows that you have done a good job buying under market value or improving the property – or maybe both – we will allow you to access that equity with a no seasoning cash out loan.
In addition to the no seasoning required feature, Hurst Lending will do these loans using debt service coverage ratio, or DSCR. This means that no income is verified other than the rent the subject property is bringing in. Investors often have a tough time proving their income due to tax write offs. This debt service coverage ratio loan with no seasoning for cash out solves multiple problems for the average investor. Hurst Lending can help you pull your equity out immediately, while only using the rent of the subject property to qualify.
Hurst will lend up to 75% loan to value for a single-family home, or 70% loan to value for a multifamily home (2 -4 units) right away. The minimum credit score for this program is 700. However, if you are a little short of that score, we can often help you improve your score to take advantage of this non seasoning cash out program. This program is not yet offered in every state we lend in, but please reach out with your scenario.
To learn more contact us today!