You bought the rental with cash. You want the cash back. On The Fiirm's DSCR program — our 1-4 unit residential investor loan — the provision that does that is called delayed financing, and it has a hard clock and a hard ceiling.
The clock: the property has to have been purchased within six months of loan approval or the Note date.
The ceiling: the new loan amount cannot exceed the purchase price plus the closing costs you paid when you acquired the property. Not the appraised value. Not what the property is worth after you fixed it. What you paid, plus what it cost you to close.
Everything else here is about proving those two things to an underwriter, because that is where these files stall.
The short answer, in order
How much comes back: the lesser of (a) purchase price plus acquisition closing costs, and (b) the maximum loan amount your LTV grid allows. Whichever is smaller wins. On a property bought well below value, the acquisition-cost cap is usually the binding number, and the appraisal does not rescue it.
When: inside the six-month window from purchase to approval/Note date. Miss the window on a free-and-clear property and the transaction is no longer delayed financing — it becomes a cash-out refinance, with cash-out LTVs and cash-out conditions.
What it costs you: delayed financing is treated as a rate-and-term refinance for pricing, which is the friendlier side of the sheet. The underwriting model will still label the file a cash-out refinance internally. That is a labeling artifact, not a pricing one.
Read that list again as a document list, because that is what it is. Six requirements, five of which are proved by paper you either have or do not have. The one that is not a document — arm's length — is the one people lose on.
The recoverable amount is your acquisition cost, not your equity
This is the part cash buyers get wrong most often, because the residential delayed-financing rules they find first read differently.
The cap here is stated plainly: purchase price and closing costs paid at acquisition. If you paid $180,000 at auction for a house now appraising at $260,000, delayed financing does not hand you a percentage of $260,000. It hands you, at most, $180,000 plus what you spent closing.
That cap sits alongside a second constraint in the valuation rules, which points the same direction.
So there are two ceilings operating at once on a property you bought a month ago: a value ceiling (use the price, not the appraisal, unless the loan stays inside cost plus documented renovation) and an amount ceiling (price plus acquisition closing costs). You clear both or you do not close at the number you wanted.
Cost Basis is a defined term, and it is broader than the delayed-financing cap
The guidelines separately define Cost Basis, and it is worth understanding because it drives the LTV math on refinances of recently-acquired property.
Cost Basis is inclusive of purchase price; borrower-paid hard and soft costs expended to date, including capital expenditure (a long-term investment made to improve or increase the value of the rental property — a new roof, new HVAC; demolition, debris removal, fixing lights and outlets, and carpet removal are explicitly not CAPEX, and paid invoices to document CAPEX may be required); and customary borrower-paid arm's-length closing costs and fees, including real estate broker commissions, title, escrow, other closing costs, and the amount of taxes, HOA dues, fees, assessments, assignment fees, and liens paid by the borrower or its affiliates in connection with and at the time of acquisition.
Two carve-outs inside that definition matter to this reader specifically. Assignment fees greater than 10% of purchase price will not be considered — which is a wholesale-deal problem, not a theoretical one. And mortgage broker fees, origination fees, and points are excluded from Cost Basis entirely.
There is also a fallback for sloppy files: if closing costs are not documented or clearly verifiable at the time of closing, up to 2% of the purchase price may be added to the purchase price for the assessment of Cost Basis. That is a floor for the disorganized, not a target. Two percent is almost always less than what you actually spent.
The documentation trail, which is what actually delays these files
Every requirement above resolves into a document. Here is the trail, in the order an underwriter will look for it.
1. The HUD-1 or Closing Disclosure from your purchase. It must reflect that no financing was obtained for the purchase of the property. This single page is the load-bearing document of the entire transaction. If your cash purchase closed without a settlement statement — a direct deed transfer, a handshake at a tax sale, a title company that issued something unrecognizable — you have a problem to solve before you have a loan to underwrite. Solve it first.
2. Preliminary title. It must reflect the borrower or guarantor as the owner, and no liens. If you bought in your own name and intend to borrow through an LLC, or bought in one entity and want to borrow in another, get vesting resolved before the title work is ordered. Acceptable forms of ownership on this program are fee simple with vesting as an individual or joint tenants; tenants in common are not permitted.
3. Proof the money was yours. Asset documentation is not waived because you already spent the funds.
This is the step that surprises people. You are not asking us to fund a down payment, so source of funds feels moot. It is not. The underwriter is confirming the cash you used was verifiable cash, which means the wire that bought the property should trace to an account you can document. Sales proceeds, proceeds from the sale of personal property, commissions from a sale, and funds received from collateralized loans may be acceptable subject to receipt of appropriate evidence. Whether the documentation you provide meets the standard is the underwriter's determination.
4. Evidence the prior sale was arm's length. Buying from a family member, from an entity you control, or from a party you have a business relationship with is not delayed financing. Chain of title gets reviewed, and entity-to-entity transfers get extra scrutiny.
5. Your renovation invoices, if you did work. Paid invoices to document CAPEX may be required. Assemble them contemporaneously. Reconstructing six months of receipts from memory in week three of underwriting is how a 30-day file becomes a 60-day file.
What changes at six months
The six-month line is not a soft guideline. It is the boundary between two different transaction types with different pricing and different LTVs.
| Item | Delayed financing (bought under 6 months ago) | Cash-out (free and clear, owned over 6 months) |
|---|---|---|
| Pricing treatment | Rate-and-term refinance | Cash-out refinance |
| Max LTV, 700 FICO, loan ≤ $1.5M, DSCR ≥ 1.00 | 80% | 75% |
| Max LTV, 680 FICO, loan ≤ $1.5M, DSCR ≥ 1.00 | 80% | 70% |
| Loan amount ceiling | Purchase price + acquisition closing costs | Per LTV grid |
| DSCR floor if owned 6–12 months | n/a | 1.00x minimum |
| Value used | Purchase price if owned under 6 months, subject to the cost-plus-documented-renovation exception | Appraised value if owned over 6 months |
Read the first two rows together. Crossing the six-month line moves a 700-FICO borrower from 80% to 75%, and a 680-FICO borrower from 80% to 70%. Waiting does not help you. It costs you grid.
The one thing waiting buys: once the property has been owned more than six months, appraised value is used to calculate LTV rather than Cost Basis. If you bought at a deep discount, there is a real trade between the acquisition-cost cap inside six months and the appraised-value basis outside it. That trade is arithmetic. Run it before you pick a lane.
LTV still has to clear its own tests
Delayed financing gets you rate-and-term treatment. It does not exempt the file from the eligibility grid or from LTV reductions.
Those are maximum LTVs on the purchase/rate-and-term column with DSCR at or above 1.00, on standard single-property loans. Above $1.5M the grid steps down. Loans below $150,000 require a minimum DSCR of 1.25x, and the program minimum loan amount is $100,000 on standard transactions.
Reductions that commonly hit a freshly purchased rental:
- Vacant or unleased. Unoccupied or unleased long-term rental properties take a 5% LTV reduction on any refinance transaction, and the unit must be in lease-ready condition if vacant. This is the most common surprise on a delayed-financing file, because a house bought sixty days ago at auction is frequently still empty.
- Inexperienced investor. Maximum LTV/LTC 75%, minimum DSCR 1.00, maximum loan $1,000,000, must currently own a primary residence for at least one year, and blanket mortgages are not permitted. An experienced investor is one whose primary guarantor has a history of owning and managing commercial or non-owner-occupied residential real estate for at least 12 consecutive months in the most recent three years, or who has had ownership in three or more properties each for at least twelve months over the past 24 months.
- Short-term rental qualification. Maximum 60% LTV for any transaction using short-term rental income to qualify, with a minimum DSCR of 1.25.
- Non-warrantable condo. 10% LTV reduction, maximum 70% LTV/LTC.
- Recently listed for sale. Properties listed for sale within six months of the Note date are acceptable only with documentation showing cancellation of the listing, an acceptable letter of explanation, value based on the lesser of the lowest list price or appraised value, and a minimum prepayment penalty of two or more years.
The rent problem on a property you just bought
DSCR is gross rent divided by PITIA at the Note rate. On a refinance — and delayed financing is documented as a refinance — the requirement is both a current lease agreement and Appraisal Form 1007. Gross rent used in the calculation comes from the lesser of the lease or the 1007, with one exception: if the lease is higher than market rent, the qualifying amount cannot exceed 10% over the appraisal's market rent, and a lease within 10% of market can be used as written.
The timing trap is specific and expensive.
Where no lease is available, three months of proof of rental receipt is required. An original or new lease with month-to-month terms is limited to 60% LTV. A fully furnished property with no lease in place is treated as vacant, with the 5% reduction.
Reserves, and the rest of the closing conditions
Reserves are post-closing liquidity, evidenced and verified prior to funding, and eligible assets of all borrowers and guarantors may be combined. Funds used for down payment and closing costs cannot be counted in reserves, and gift funds are not permitted to meet reserve requirements. Cash-out proceeds may be used for reserves if FICO is above 700 — relevant here, because on a delayed-financing file the proceeds are the whole point.
A few other conditions that touch these transactions:
- The loan must be for business purposes only and certified as such by the borrower/guarantor.
- Subordinate financing is not permitted.
- The subject property must be appraised within 90 days prior to the Note date, by an interior appraisal ordered through an approved Appraisal Management Company. Appraisals ordered by the broker or borrower directly are not acceptable, and re-use of a prior appraisal is not permitted regardless of its date. If you got an appraisal when you bought the property, it does not carry over.
- Properties rated C5/C6, not lease-ready, rated Q6 for construction, or in fair condition are ineligible.
- There can be no pattern of previous flipping as evidenced by multiple transfers in the last 12 months.
- Rural properties, as defined by the CFPB rural designation tool or as identified on the appraisal, are not eligible.
The sequence that closes
1. Before you write the cash offer, model the recovery off purchase price plus expected closing costs, not off value.
2. At closing on the purchase, get and keep the HUD-1/CD. Confirm it shows no financing.
3. Keep the account statements that fund the purchase wire, and be ready to document any large or unusual deposit into that account.
4. Get the property leased and occupied before the appraisal inspection, or accept the 5% reduction knowingly.
5. Collect renovation invoices as you go.
6. Apply well inside the six-month window. The window runs to approval or the Note date, not to application, and appraisal, title, and asset review all consume calendar.
What this page does not do
This page does not price your loan, approve it, or commit The Fiirm to any term. Every figure here is drawn from the current program guidelines and is subject to the LTV reductions, DSCR floors, credit standards, property conditions, and state-specific restrictions that apply to your file. Underwriting is manual, and the underwriter determines whether the documentation you provide meets the standard.
It also does not cover things the guidelines address in more detail than fits here: portfolio and blanket structures, non-permanent-resident eligibility, condominium project review, insurance requirements, prepayment penalty structures and their state-by-state restrictions, and credit-event seasoning.
And it does not answer questions the guidelines are silent on. The guidelines do not enumerate acceptable substitutes for a purchase HUD-1/CD, do not state a maximum number of delayed-financing transactions per borrower, and do not spell out how the narrow delayed-financing loan-amount cap reconciles with the broader Cost Basis definition on a file with documented renovation. Where the guidelines are silent, the answer is an underwriter's, not a web page's. Bring the file.
Guideline DSCR V28 · Reviewed August 31, 2026
Published August 31, 2026 · Updated August 31, 2026
How to use this guide
This article is educational guidance, not an offer or commitment to lend. Rules, property facts, credit, leverage, documentation, and full underwriting still control any actual scenario.