Buy cash, cash-out refi inside 6 months at purchase price — not appraised value.
Fannie Mae's Delayed Financing Exception lets an investor who bought a property with cash (including card-funded or private-money-funded) do a cash-out refinance within 6 months of closing at up to 75% LTV — using purchase price + closing costs as the basis, bypassing the normal 6–12 month seasoning. Enables true BRRRR at conforming rates without hard money.
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If you bought a property with cash, Fannie Mae's delayed financing exception lets you take a cash-out refinance without waiting out the usual six-month ownership clock. It waives the seasoning requirement — and only that. The loan is still underwritten and priced as a cash-out refinance, with the same LTV limits, credit standards and cash-out pricing.
The catch most people miss is the loan-amount cap. The new loan can be no more than what you actually documented putting into the purchase, plus the closing costs, prepaid fees and points financed on the new loan — subject to the cash-out LTV limits based on the current appraised value. So delayed financing returns your purchase capital. It does not let you pull out post-rehab equity; that still needs the standard seasoned cash-out refinance.
It is a conventional-only exception. FHA, VA and USDA cash-out programs have their own seasoning tracks and no direct equivalent.
All of these have to be true. Miss one and you fall back to the standard cash-out rules, which means waiting until at least one borrower has been on title six months.
Illustrative numbers, not a quote. The point is to show which figure actually caps the loan — run yours before you commit capital.
| Purchase price (paid cash) | $185,000 |
|---|---|
| Purchase closing costsDocumented on the settlement statement | $4,200 |
| Documented investment in the purchaseThis is the figure the cap is built on | $189,200 |
| Rehab paid out of pocketNot reimbursable under delayed financing | $25,000 |
| Appraised value at refinance | $265,000 |
| LTV ceiling at 75%Confirm the current limit for your occupancy and unit count | $198,750 |
| Closing costs financed on the new loan | $3,800 |
| Cap from documented investment + financed costs | $193,000 |
| New loan amountThe lower of the two ceilings governs | $193,000 |
The whole $189,200 you put into the purchase comes back at closing, and the financed closing costs ride along. The $25,000 of rehab money stays in the deal — the appraised-value ceiling of $198,750 was never the binding constraint, the documented-investment cap was. To recover the rehab too, you wait for the seasoned cash-out and refinance against the $265,000 value.
See what a cash-out refinance and the other capital sources would actually give you on your numbers — no bank connection, no credit pull.
Run your borrowing powerDelayed financing is a documentation exercise, and the documents are created at the purchase closing. Tell the lender the plan up front and confirm they underwrite the exception — not every loan officer has done one.
No seller relationship, no mortgage financing on the purchase, no liens recorded. Get the settlement statement at closing and keep it.
Bank statements showing the wire, private-note documents, or the HELOC draw on another property. Wired-from-nowhere money is the most common reason these files stall.
The clock runs from the purchase date to the disbursement date of the new loan, not the application date. Appraisal, title and underwriting realistically take three to six weeks, so start in month two or three rather than month five.
If a HELOC or unsecured loan funded the purchase, the refinance settlement statement has to show it being paid off or down from the proceeds. Any leftover balance lands in your DTI.
The most expensive misunderstanding. Delayed financing returns your documented purchase investment, not your after-repair equity. If the deal only works when you pull the rehab back out immediately, this is the wrong tool.
Gift funds cannot be reimbursed from the new loan. Money from family has to be a documented loan if you intend to recover it.
A partnership or LLC works only when the borrowers hold 100%. A partner with a slice breaks eligibility.
Any existing lien on the subject property disqualifies the exception, including a private lender's recorded deed of trust. Unsecured or secured-elsewhere is the workable shape.
Rehab paid in cash to contractors with no paper trail cannot be counted anywhere and weakens the file even where it isn't reimbursable.
A provision in Fannie Mae's Selling Guide that lets someone who bought a property with cash in the past six months do a cash-out refinance immediately, instead of waiting until a borrower has been on title six months.
Your documented investment in the purchase plus the closing costs, prepaid fees and points financed on the new loan, capped by the cash-out LTV limit against the current appraised value.
No. Rehab spent after the purchase falls outside the documented purchase investment. Recovering it requires the standard seasoned cash-out refinance.
A loan secured by the subject property does, because the title search has to show no existing liens. An unsecured loan or one secured by another property is allowed, but the cash-out proceeds must pay it off or down at the refinance closing.
No. This is a conventional exception. Government programs run their own seasoning rules.
Treat it like any cash-out refinance: appraisal, title and underwriting, typically a few weeks. The binding deadline is the six-month window measured to disbursement.
Educational strategy content, not tax, legal, lending or investment advice. Lender overlays and program limits change — confirm current requirements with your lender before committing capital.
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