The Quick Read: Fannie Mae lets time held by an LLC you majority-own or control count toward its six-month ownership test, but the loan itself goes to you as an individual, so the property must be deeded out of the LLC before closing, which is why many BRRRR investors holding rentals in an entity compare DSCR cash-out loans instead. Seasoning is the waiting period a lender wants before it will refinance a property you recently bought. This guide walks through how the agency treats an LLC-held rental, where the rule bends, and what the alternative looks like.
- Fannie Mae’s cash-out rule has a six-month ownership test, and LLC holding time can count if you majority-own or control the LLC.
- To close an agency loan, title moves out of the LLC and into your personal name.
- A separate clock tracks the age of the loan being paid off, so a hard-money payoff can trip a second test.
- Delayed financing waives the ownership wait, but only for certain cash purchases.
- DSCR cash-out loans are not agency products, and each lender sets its own seasoning policy.
What Are the Key Terms Here?
Four terms come up in every conversation about this topic. Each is defined once here.
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BRRRR: Buy, rehab, rent, refinance, repeat. You pull your cash back out through a cash-out refinance and reuse it on the next deal.
Seasoning: The waiting period a lender requires between two events, usually between buying a property and refinancing it.
DSCR: Debt service coverage ratio. It compares the property’s rent to its monthly payment covering principal, interest, taxes, insurance, and any HOA dues (PITIA).
Delayed financing: An agency exception that lets you refinance a property you bought with cash without waiting out the full ownership period.
How Do LLC Seasoning Rules for BRRRR Cash-Out Work Under Fannie Mae?
Under Fannie Mae’s cash-out rules, a property generally needs about six months of ownership before you can pull equity out. If an LLC that you majority-own or control held the property first, its holding time may count toward that six months. The Fannie Mae Selling Guide on cash-out refinance transactions says so, and it also says title must move out of the LLC into your name to close.
Here is how an agency refinance usually runs for an LLC-held BRRRR property:
1. Buy and rehab. Most BRRRR investors do this inside an LLC, often with short-term hard-money financing.
2. Count the ownership clock. Your operating agreement shows you majority-own or control the entity. That lets the LLC’s time count.
3. Check the second clock. If an existing loan is being paid off, its age gets its own test.
4. Deed the property out of the LLC. This must happen by closing. You give up the entity’s liability shield on that property.
5. Underwrite as an individual. Your personal income, debt-to-income ratio, and count of financed properties all come into play.
6. Appraise the property. Rental properties typically involve a rent schedule (Form 1007) or a small-income-property appraisal (Form 1025).
Step four is where many LLC investors balk. They built the structure on purpose, and the agency path asks them to take it apart.
What Are the Two Clocks?
Most confusion on this topic comes from mixing two separate tests. One clock measures how long you have owned the property. The other measures how old the loan being paid off is.
| Factor | Ownership clock | Loan-age clock |
|---|---|---|
| What it measures | Time on title | Age of the loan paid off |
| Starts at | Deed recording | Note date of that loan |
| LLC time counts? | Yes, if you control the LLC | Depends on who signed the note |
| Hits BRRRR when | Rehab runs short | A hard-money loan is paid off |
The agency has changed the loan-age clock before, so confirm the current wording on the Selling Guide page before you plan a timeline. The ownership clock is the one the LLC carve-out speaks to.
Will Fannie Mae Lend to My LLC?
No. Agency borrowers are individuals, and the loan closes in your personal name. That is why the Selling Guide requires the transfer out of the LLC. The agency’s limited cash-out section, B2-1.3-02, covers a related case where you owe on the loan being paid off but are not on title. It includes property owned by an LLC you majority-own or control, and ownership must move into your name there too.
The control language matters. If you hold a minority stake in the LLC, the carve-out that lets entity time count is not available. A partnership with a friend can therefore break the ownership math.
State law adds another wrinkle. A few states define cash-out differently from the agency, and a law-firm explainer on that mismatch shows how the definitions can collide. Check how your state treats it before you commit to a timeline.
What Is the Delayed Financing Exception?
Delayed financing waives the six-month ownership wait for a property bought with cash. Your original purchase must have been arm’s-length, meaning a normal sale between unrelated parties. The Selling Guide also allows the cash purchase to have been made through an LLC in which you hold 100% individual or joint ownership. Bankrate’s overview of delayed financing adds that there is no six-month wait, though you still pay the closing costs of a new loan.
Three limits keep it from being a shortcut:
- It applies to cash purchases, not financed ones.
- Proceeds are generally limited by what you documented paying in, plus closing costs.
- The loan is still treated as a cash-out refinance.
Financing the purchase with hard money breaks the exception, and a borrower in that position falls back to the standard six-month seasoning clock. Run this check before you assume the exception applies.
What Does a BRRRR Timeline Look Like?
Run the numbers on a timeline, not on dollars. Say you buy a rental through your LLC with hard money in month zero. Rehab finishes around month four, and a tenant signs soon after.
Under the agency path, you cannot refinance until about month six at the earliest, because the ownership clock needs time. Then the loan-age clock for the hard-money payoff gets checked on top of that. You also have to deed out of the LLC before closing.
Sizing is the other half. Right after a purchase, lenders often size the loan on your cost basis, meaning what you paid, rather than the appraised value. Once the property is seasoned, the appraised value generally takes over. That is the point of waiting. At a 75% cash-out LTV ceiling on a standard rental, the gap between cost-basis sizing and value sizing is the amount of equity you can actually recycle.
Which Path Fits Your Situation?
| Your situation | Likely path |
|---|---|
| LLC-held, hard-money purchase, under six months | Wait out the clock or consider DSCR |
| Cash purchase through a 100%-owned LLC | Delayed financing may apply |
| LLC with partners, you hold a minority stake | Agency LLC carve-out likely unavailable |
| Want to keep property in the LLC | DSCR cash-out, subject to lender program eligibility |
| Past six months, willing to deed out | Agency cash-out is on the table |
How Does a DSCR Cash-Out Handle LLC Seasoning?
A DSCR investor loan is not an agency loan. Across our wholesale network, each lender sets its own seasoning policy, and most programs expect about six months of ownership, measured from title recording. Lenders differ on two points that matter to LLC investors: whether the LLC’s holding time counts, and whether a re-deed restarts the clock. Ask before you move title.
The structure is different too. DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines, and many programs allow the LLC to stay on title, subject to lender program eligibility.
Here is what most programs we place files with look like on a standard-rental cash-out:
- Leverage: Tops out around 75% LTV on a cash-out of a standard rental. A 70% ceiling applies to cash-out on short-term-rental collateral.
- Coverage: 1.00 is where many select programs start. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted.
- Credit: A 620 floor exists in parts of the network. Most programs want around 660, and 700 or higher opens the strongest leverage tiers.
- Reserves: Commonly about six months of PITIA, stepping up to about nine months above $1,500,000.
- Loan size: Up to $3,000,000 on standard programs.
Clearing 1.00 coverage does not mean the property cash flows. Repairs, vacancy, management, utilities, and capex sit outside the calculation. Program details vary by borrower, property, and lender, and nothing here is a commitment to lend. Our complete DSCR loans guide covers the full picture, and Lendmire’s investment cash-out refinance calculator page offers an illustrative estimate of how the sizing might look.
Not every property qualifies. Manufactured homes, log homes, and barndominiums are not offered through the network’s DSCR programs.
What Documents Does an LLC File Need?
Gather these before you apply, whichever path you choose:
- Operating agreement showing ownership percentages and who controls the entity
- Deed history showing when the LLC took title and any later transfers
- Settlement statement from the original purchase
- Payoff letter for any hard-money or bridge loan
- Lease and rent evidence for the property
- Proof of reserves
On an agency file, add your personal income and debt documents. On a DSCR file, the property’s rent carries more of the weight.
What Mistakes Break the Clock?
- Deeding into the LLC mid-process. On a DSCR file, a re-deed can restart the clock with some lenders. Ask before you move title.
- Counting from contract date. Seasoning typically runs from recording, not from the day you signed.
- Assuming strong rent shortens the wait. Rent affects coverage. It does not change a seasoning period.
- Treating delayed financing as a quick-flip tool. It is built for cash purchases with clean documentation.
- Confusing the two clocks. Meeting the ownership test does not mean the loan-age test is met.
The six-month wait is lender and investor policy, not federal law. That is why DSCR lenders can set their own windows.
What Should You Do Next?
Decide first whether the LLC matters to you. If you will deed out gladly and want agency-style terms, start the paperwork once your ownership clock is met. If you want to keep the LLC on title, start with DSCR lenders and ask the two questions above before you move any deed.
Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction. This article is not legal or tax advice. Consult a qualified attorney or CPA about your own situation before restructuring title or entity ownership.
Frequently Asked Questions
Does putting a BRRRR property in an LLC reset the seasoning clock?
Under Fannie Mae’s rule, time held by an LLC you majority-own or control can count toward the six-month ownership test. DSCR lenders vary. Some count the entity’s time, and some restart the clock after a re-deed, so confirm with the specific program before you change title.
Can I use delayed financing if I bought with hard money?
Generally not. The exception is built for cash purchases, and a hard-money lien takes the purchase out of that category. You would fall back to the standard ownership clock.
What is the difference between cash-out and limited cash-out?
Limited cash-out pays off the existing loan and closing costs with little or no cash back. Cash-out returns equity to you and carries tighter seasoning and leverage limits. In the agency guide, limited cash-out also covers cases where you owe on the old loan but are not on title.
Do lender overlays add to the agency rule?
Often, yes. Individual lenders can set stricter standards than the agency minimum, so the guide’s six months may not be the only wait you face.
What is the maximum cash-out LTV on a DSCR loan for a standard rental?
Most programs in our network top out around 75% LTV on a cash-out of a standard rental, and 70% on short-term-rental collateral. Reserves, credit, and coverage still have to clear, so the leverage cap is a ceiling, not a guaranteed amount.
Where Can You Compare Your Options?
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals. As a broker, Lendmire arranges financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. Qualification is subject to lender guidelines.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
As a DSCR and non-QM mortgage broker, Lendmire — NMLS# 2371349 — connects investors with wholesale lending channels across 41 markets, including Washington, D.C. The property’s rental income, not the borrower’s tax returns, is central to lender review, which works for self-employed operators and portfolios beyond four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Selling Guide: Cash-Out Refinance Transactions (B2-1.3-03)
2. Fannie Mae Selling Guide: Limited Cash-Out Refinance Transactions (B2-1.3-02)
3. Sandler Law Group: Texas Cash-Out vs. Fannie Mae Cash-Out
4. Bankrate: Delayed Financing
This article is part of Lendmire’s investment property cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can an All-Cash Buyer Cash Out a Rental Before 12 Months? · How a BRRRR Investor Documents Hard Money for Delayed Financing · Cash-Out vs HELOC vs Delayed Financing When Scaling to 10 Doors
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.