Have you purchased a home or investment property with all cash?

Problem

Fannie Mae and Freddie Mac guidelines have always required you to own the property for at least 6 months before you could use the newly appraised value to get a cash-out mortgage loan.

Solution

Delayed financing exception.

There is a little-known niche within Fannie Mae underwriting guidelines that allow for a cash home buyer to immediately do a cash-out home loan on the recently purchased property. Here is a link

There are a few standard underwriting requirements

The cash funds used to buy the property must be documented.

Why? Because if you got a personal loan or a HELOC the funds used from other loans must be repaid at the new mortgage loan closing.  In addition, the anti-money laundering regulations require lenders to document large deposits and sums used for large purchases.

Unless you have a magic money tree somewhere this should be an easy condition to satisfy.

If all of the funds were a gift they cannot be repaid with this loan. Gifts are not supposed to be repaid. In this case, you’ll be able to get the full loan amount without any repayments.

Here is the answer to the most asked question. How much cash can I take out?

It depends on whether you are living in the home or if it is a rental, second vacation home, 2-4 units, etc.

You can download the important part below (2nd page of Fannie’s matrix) and our marketing flyer.

The rest of it will rarely apply but it’s here on Fannie Mae’s website. These documents except for the flyer are in lender speak so please give us a text or call 813-850-6021. Remember we make lending simple.

Delayed Financing Flyer Niche Broker LLC & FNMA Cash Out LTV pg2

In summary, if you live in the home you can get 80% of the current appraisal – total new loan not to exceed what you recently paid plus closing costs

If it’s a rental or second home then you are looking at a maximum of 75% of the newly appraised value.

Example

Recently Purchased for $200,000

New Appraisal $250000

Max loan for owner-occupants $200,000  – Essentially that’s a 100% loan right there. Standard guidelines would only allow a loan of $160,000

Max loan for investors with less than 9 other financed properties. $187,500 is essentially a 94% loan in this case.  Standard underwriting would only allow $150,000 cashback.

Hopefully, I’ve done a good job of breaking down this niche mortgage loan exception. If not please shoot me a text at 813-850-6021 so we can discuss this further.