Delayed Financing Creates Investor Loyalty for Realtors and Lenders

by 11 Feb 2013

Making the most of what opportunities the market bares can be the differentiator between making a living and just scraping by. 

For those of us that invest a large part of our efforts to the purchase market, we are challenged by low inventory, multiple offers, and all cash investors making it all but impossible to compete if our client is a low down, first time buyer. 

If you can’t beat ‘em, join ‘em 

Delayed financing offers a unique opportunity for Realtors and Lenders to attract all cash investors by offering them immediate access to their equity while waiting out flip rule timelines to turn their inventory. 

Delayed financing is a special exception Fannie Mae program that allows investors to cash out refinance a property that is owned less than 6 months up to 65% of the purchase price.  Simply put, a qualified, all cash investor can take 65% of their equity out of an investment home one day after close of the sale! 

Requirements for a Delayed Financing Exception 

Borrowers are eligible for cash out refinance if all of the following requirements are met:

  • The original purchase transaction must have been an arms-length transaction.  An arms-length transaction means there is no relation between the seller and the buyer of the home. 
  • The original purchase transaction must be documented by a HUD-1, which confirms that no mortgage financing was used to obtain the subject property.  The preliminary title report must confirm that there are no existing liens on the subject property. 
  • The source of funds for the purchase transaction must be documented (bank statements, personal loan documents, or a HELOC on another property). 
  • The new loan amount cannot be more than the actual documented amount of the borrower’s initial investment in purchasing the property.  Gift funds used to purchase the property may not be reimbursed with proceeds of the new mortgage loan. 
  • All other cash-out refinance eligibility requirement must be met.

Realtors and Lenders that partner up to offer all-inclusive services to all cash investors have multiple opportunities and generating consistent income streams by allowing investors to leverage the bank’s money to turn inventory quicker. 

Get creative when offering this product to your all cash investors.  Packaging these services will encourage investors to look forward to the next investment while closing subject property. 

Package and market your Investor Concierge Services to include:

  • Realtor’s can forward closing documents to lender upon closing of purchase.
  • Lenders offering multiple delayed financing transactions to investor will need only update expired documentation such as credit, income and asset documentation.  All other information can be simply verified verbally leaving a streamlined transaction for your investor.
  • Agent can immediately begin seeking out new investment opportunities upon close of subject property knowing that equity will be available in 30 days or less.

This is a niche program for savvy marketers and capable lenders.  This is only a high level overview of the potential of this program.  Put the time and effort into understanding the qualifying guidelines and boundaries of delayed financing. 

Sit down with your Lender or Realtor partner and craft a strategy to attract these repeat transaction investors and you will create a winning proposition for all parties involved. 


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