All conforming loan programs and most non-conforming programs have set seasoning requirements on the appraised property value when refinancing. Remember that the loan is limited by the LTV, which with a refinance is normally calculated against the appraised value. For example, an 80% LTV refinance on a property appraised at $100,000 is an $80,000 loan amount. However, in the first twelve months after a purchase, the LTV must be calculated against the lower of the purchase price or the appraised value. Thus, if the borrower has purchased the property for half of its true market value, that equity is essentially unattainable (with conforming loans) during the first twelve months. For more information, see the "Refinance Loans" article in the "Loan Programs" section.
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