Rental Property Cash-Out Refis: Visio vs. Fannie and Freddie

Posted by Hannah Lapin on Dec 20, 2018 9:00:00 AM

Cash-Out Refi Fannie vs Visio

While government sponsored loan programs (Fannie Mae and Freddie Mac), tend to be the most affordable, they also have the most restrictions.  Buy and hold investors looking to grow their rental portfolios often run into some qualification road bumps for these types of loans. Visio Lending, on the other hand, has loan programs tailored to residential real estate investors. We've done a side by side comparison of our qualifications for cash-out refinances versus Fannie and Freddie:

Minimum Credit Score

Fannie/Freddie: 700, which is only acceptable when you have at least 12 months of liquid cash reserves OR a maximum DTI of 36%

Visio: 680

Maximum Number of Mortgaged Rental Properties

Fannie/Freddie: 10

Visio: No limit

 

Minimum Number of Liquid Cash Reserves

Fannie/Freddie: 6

Visio: We require 3 months of Principal, Interest, Taxes, Insurance and Association Dues (PITIA)

 

Maximum Debt-to-Income Ratio (DTI):

Fannie/Freddie: 45%, if you have 12 months of financial reserves

                              36%, if you have 6 months of financial reserves

Visio Lending: Instead of DTI, we use DSCR, which evaluates property cash flow rather than personal income

 

Maximum LTV

Fannie/Freddie: 75% for 1 unit and 70% for 2-4 units, ONLY if your credit score is at least 700

Visio Lending: 70%

 

Want more guidance on when government financing is a good option for you? Check out our blog post "Should You Conform?" and our Decision Tree. on which financing is best for you. Want more resources for landlords? Visit our Resources Page.

More Resources

Editor's Note: This post was originally published in December 2018 and has been updated in March 2020 for freshness and accuracy. 

 Related: 3 Investor Financing Options, Guide to SFR Real Estate & Types of Loans

Topics: Real Estate Investing