Delayed Financing Mortgage Guidelines By FNMA On Refinancing


Delayed Financing Mortgage Guidelines By FNMA On Refinancing

This BLOG On Delayed Financing Mortgage Guidelines By FNMA On Refinancing Was UPDATED On September 3rd, 2018

There are times when a home buyer or real estate investor will purchase a home with cash with the intention on doing a cash-out refinance mortgage at a later time. There are Delayed Financing Mortgage Guidelines these types of home buyers need to abide by:

  • There are many reasons why a home buyer will purchase a home cash
  • The home seller may prefer selling their property to a cash buyer with no mortgage contingency where it is a hot property
  • Or the property may not qualify for a conforming loan due to repairs needed and/or the property not being habitable
  • Sellers may only take a fast closing purchase offer 
  • Many home buyers assumed that they can easily do a cash-out refinance mortgage loan right after purchasing a home cash
  • Unfortunately, due to the real estate, credit, and banking collapse of 2008, there are new rules and regulations when it comes to cash-out refinance mortgage loans
  • New Delayed Financing Mortgage Guidelines were implemented
  • To do a cash-out refinance mortgage with a conventional loan program, borrowers needs to wait six months
  • However, there is an exception to this rule. 
  • Fannie Mae will allow an exception to do a cash-out refinance mortgage loan under six months via Delayed Financing Mortgage Guidelines
  • Home buyers can now purchase a home cash and do a cash-out refinance mortgage loan the next day through the Delayed Financing mortgage loan program

Fannie Mae Delayed Financing Mortgage Guidelines

Foreclosures and REO properties often times need a lot of work. Often times foreclosures and REO properties are not habitable and need renovations:

  • Unhabitable properties are difficult to get mortgage financing
  • Home buyers and investors often times need to purchase it with cash or non traditional means such as hard money loans
  • With the delayed financing mortgage loan program, a home buyer can purchase a home cash
    • make the home habitable or mortgageable
    • do a cash-out refinance mortgage loan prior to the six month mandatory traditional waiting period to do a cash-out refinance
  • Any qualified borrower can do a delayed financing mortgage loan as soon as he or she closes on their home purchase
  • The cash used for the home purchase needs to be documented and sourced
  • The new mortgage loan cannot be greater than the actual purchase price of the subject property
  • Rehab money invested in the subject property cannot be cashed out
  • Only the original purchase price can
  • The purchase transaction of the property needs to be an arms length transaction and cannot be a family member selling it to another family member
  • Maximum loan to value on delayed financing cash-out refinance mortgage loans are capped at 70% LTV
  • Any residential properties up to 4 units will qualify
  • Second homes and investment homes may also qualify for delayed financing mortgage loan programs

Qualifying For Mortgage With Direct Lender With No Overlays

Home Buyers who need to qualify for mortgage with a direct lender with no mortgage overlays can contact us at Gustan Cho Associates at Loan Cabin Inc. at 262-716-8151 or email us at The Gustan Cho Team at Loan Cabin Inc. has zero overlays on FHA, VA, USDA, Conventional Loans. We are also correspondent lenders on non-qm loans and bank statement mortgage loans for self employed borrowers. Our support and licensed personnel are available 7 days a week, evenings, weekends, and holidays.

Gustan Cho

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