Is a Cash Out Refinance the same thing as Delayed Financing?

[Vincent Egan]

Hello,

It's been a while since I've posted and this may be a dumb question but I wanted some clarity on this topic.

I know a cash out refinance is a way to pull out built up equity in your home and I know that delayed financing is essentially the same thing but immediately after purchasing a house with cash but this is where I get confused.

Is delayed financing just when you perform a cash out refinance soon after paying cash for a home?

I've read some articles and forum posts and am still a little confused. Any information, stories, or links would be greatly appreciated.

Thanks!

[Andrew Postell]

@Vincent Egan yeah, ask away.  We're here to help.  Delayed Financing is a cash out loan but it's one that occurs in the first 6 months of owning a home that you purchased with cash.  This description is important because receiving cash out with Fannie/Freddie money in the first 6 months is not permitted...unless you purchased with cash.  And that is called "delayed financing".  So it's really a specific form of cash out refinancing.  I wrote an entire post on it for Bigger Pockets (and how to avoid it) that you can find HERE. Thanks!