Delayed Financing Program

Fannie Mae’s delayed financing exception now allows you to obtain a cash-out refinance if you purchased your property in cash within the preceding six months of the closing date. In the past, Fannie Mae would not allow you to access the equity in your home within the first six months of your purchase.

However, by meeting some guidelines set forth by Fannie Mae, you can easily extract the existing equity in your home with no wait time. Talk with one of our experts at MortgageDepot today and we will guide you through the program and discuss the following guidelines:

• The purchase must be an arms-length transaction. In short, if you purchased the home from family, a business partner or something similar, you are ineligible.
• You must verify where the cash originated from to make the home purchase. If you used the funds from a personal loan to purchase the property, you must provide bank statements or documents verifying the personal loan. If you used a home equity line of credit from another property, you must provide those documents, and you must pay down the HELOC with the funds from the new cash-out refinance.
• You must provide a settlement statement from the purchase of the subject property documenting that you did not use mortgage financing to secure the purchase.
• Your new cash-out refinance cannot exceed the actual amount of your initial investment to purchase the home. All cash-out refinances under the program are subject to the maximum loan-to-value, combined loan-to-value and high-combined loan-to-value ratios.
• The preliminary title search on the subject property must be free of any existing liens.
• You must not own more than 10 investment properties in order to qualify.

The Benefits of the Delayed Financing Program

Under the exclusion set forth by Fannie Mae, you can start the process of extracting the equity from the home as soon as you sign the closing documents. For example, if the property is in disrepair, you can immediately access the equity without waiting six months and turn it into cash to quickly repair the property.

Other benefits exist under the Delayed Financing Program, including using the program as a hedge against rising interest rates. To find out how you can use the program to its maximum potential and discover all the benefits of the program, talk to one of our experts today.