Properties Owned Free & Clear (no existing liens, always considered cash out)
If the property was purchased 6-12 months prior to application, the LTV/CLTV must be based on the lesser of the purchase price plus documented improvements or appraised value. This requirement is applicable for properties that were purchased with cash or gifted; it is not applicable to inherited properties - refer to the Buyouts topic for further requirements.
Properties with an Existing Lien (i.e. any property not free and clear for R/T and C/O Transactions)
Value seasoning rules do not apply. However, the appraised value must be very well supported if it exceeds the original purchase price since it was purchased in the last 12 months. If the property is in an area of stable or declining values, it may be necessary to document home improvements to support an increase in value.
(Refer to the New Construction Transactions topic for New Construction Seasoning requirements).