A Delayed Financing Mortgage allows you to cash out up to 100% of the purchase price or 70% of the appraised value, whichever is lower, within 1 to 180 days after purchasing the property. On the other hand, a traditional cash-out refinance requires a waiting period of 365 days.

In the current competitive real estate market, cash purchases are preferred by sellers for their perceived certainty. This compels many buyers to become cash purchasers, then applying for conventional mortgage financing after acquiring the property. This financing strategy encounters a hurdle. The underwriting guidelines for most conventional home loans are set by Fannie Mae and Freddie Mac. Nevertheless, their rules prohibit a cash-out refinance within twelve months of acquiring the home. To address this problem, a special provision was created for this unique situation.

Therefore, a Delayed Financing Mortgage loan is a specific sort of cash-out refinance employed to grant financing to a cash buyer soon after obtaining the home.