I would like to see what options, if any, are available for the following:

Can I take the equity from my current home to use as a down payment on another home and change the status of my current home to non-owner occupied and rent/lease the property?

What guidelines are there for such a process? What type of credit score would be required?

Most of the lenders in residential property sell the mortgages in the secondary market, which means that they are looking for the same type of loans so they can be all grouped together and sold. Unfortunately for you this means owner occupied primary residence loans. On the other hand, if you were to refinance your house with the full intention of keeping it as your primary residence and then decided to rent it out. I don't see much of a problem there. Please take into consideration that I am not suggesting that you lie on your mortgage application. That's a federal offense. But if you happen to change your mind, well, that's another story. It would have to come to a matter of timing.

Regarding the kind of credit score needed for a loan. Credit Score will affect pricing more than anything else. Although is true that a lot of banks will give loans only if you have a particular score because the "investor" requires that minimum to buy the loan. There are other banks and financial institutions that have several types of programs tailored to different levels of credit score. I could not give you a specific number since I don't deal with individual request that much, but keeping your score over 700 is always good.

I was wondering if there is 100% financing available to buy rental property specifically a 3 apt house? The best I have seen is 90% at a local bank. Thank you.

Hello Preston:

Finding a bank to provide 100% financing would be an impossible task. The only way something like that could happen would be if the bank was trying to avoid a foreclosure situation or you happened to have a long-standing relationship with the institution. Even if you had a long-standing relationship with the bank, they will probably ask you to tie this 100% loan to other loans to mitigate the weakness.

Your best bet would be to:

Get a loan with a finance company / not a Bank This will also be difficult as they are a bit more….. what is the word I am looking for….. predatory than your regular Bank. You might have to contact several companies in order to find out one that would agree to funding the loan and frankly I doubt that you will be successful.

Get the seller to agree to a second mortgage This way the bank can provide a loan that will keep it under its loan-to-value guidelines. Having a first and a second mortgage on the property means two payments, but if the rental income is enough, this might be doable.

<snip> offers 100% non-owner investment property financing, nationwide, for SFR, Condo, PUD and 2-4 family properties.

My company is set up with several lenders who offer 100% Investment Property Financing for 1-4 Unit (Residential) Property.

Concerning your original post- You do not need to "change" the status on your existing loan if you are simply looking to purchase an owner-occupied property. Simply provide a lease agreement and the new lender will consider the old property investment.

If you are looking to refinance for cash out, the rates would be more attractive if you finance the new loan while you are still occupying the property. However, it is possible to obtain cash even after it has been leased.

Contact me directly if you'd like me to evaluate your options, give you some rates and ballpark payments, and we can figure out the best way for you to structure this.

Normally, a local bank will max. out at 90% investment property financing. If you want to take money out (cash out refinance or 2nd mortgage) of an existing property you can use a down payment program on a standard "conforming" loan or on an ALT-A loan. Money from existing homes are treated as "seasoned" funds, as they are from the Equity that you already have in a property and can be used for down payment and/or closing costs. There are also 100% financing programs available for (investment) residential properties, up to 4 units.