Delayed Financing Exception
The delayed financing exception is Fannie Mae's carve-out that lets a buyer who paid cash for a property do a cash-out refinance without waiting out the usual six-month title seasoning, subject to the guide's conditions on the original purchase.
The exception exists because the six-month seasoning rule would otherwise punish cash buyers: they competed with a cash offer, and delayed financing lets them put a loan on the property afterwards and recover that capital sooner. Fannie Mae Selling Guide B2-1.3-03 lists it as an explicit exception to the six-month title requirement, with conditions on how the original cash purchase was funded and documented.
For a cash-funded BRRRR deal, this is the fastest legitimate path to the refinance step. The conditions are specific and the guide is the authority, so a deal that plans on delayed financing should be structured against the current guide text and the chosen lender’s overlays, not a summary.
Used in these calculators
Guides that put this term to work
Related terms: Seasoning Period , Cash-Out Refinance
Source: Fannie Mae, Selling Guide B2-1.3-03 (cash-out refinance transactions)
Last updated . Part of the FinExplained finance glossary .