Delayed Financing on a Rental: The 75% Cap and What It Costs
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Quick Answer
As of October 22, 2026, Fannie Mae lets an investor who bought a rental with no mortgage financing take a cash-out loan inside six months of purchase (Selling Guide B2-1.3-03, version of December 10, 2025), but on an investment property the exception returns less than the purchase price: the new loan is capped at 75% of the current appraised value on one unit and 70% on two to four units (Eligibility Matrix, August 5, 2026), and at the documented initial investment plus financed closing costs. A cash buyer who paid $300,000 for a one-unit rental that appraises at $300,000 can borrow at most $225,000 and keeps about $81,000 of the $306,000 invested in the property (our arithmetic, with 2% purchase closing costs assumed). The price is cash-out pricing: for a credit score of 740 to 759 at 70.01% to 75% loan-to-value, the two Fannie Mae price adjustments add up to 3.750% of the loan. Freddie Mac caps the loan at the purchase price plus closing costs, less gift funds. Kiavi says its cash-out is available after 90 days or on free-and-clear properties.
Key Takeaways
- The exception waives the six-month wait, not the loan-to-value limit. Fannie Mae's Eligibility Matrix of August 5, 2026 sets the cash-out maximum on investment property at 75% for one unit and 70% for two to four units, so the most a cash buyer can pull back is 75% or 70% of the appraisal (our arithmetic).
- The purchase-money cap rarely binds. On one unit it is the lower number only when the appraisal is more than about 36% above the price paid; in the 16 price and appraisal pairs we tested it bound in 4, all at an appraisal 40% above the price (our arithmetic).
- It is priced as a cash-out: at 740 to 759 and 70.01% to 75% LTV the cash-out adjustment is 1.625% and the investment-property adjustment 2.125%, 3.750% together, $9,281 on a $247,500 loan (Fannie Mae LLPA Matrix, September 30, 2026; our arithmetic). At 660 to 679 the total is 6.125%.
- Freddie Mac's version caps the loan at the original purchase price plus related closing costs, less gift funds, and requires no relationship between buyer and seller (Guide 4301.5, effective February 4, 2026). Its investment-property LTV limits are not on that page and are not in this data.
- Some non-agency lenders publish shorter clocks than six months: Kiavi, 90 days or free and clear; Lima One, full market value in 90 days with up to 75% LTV on cash-out (their websites, read October 22, 2026). Those are lender claims, not rules.
- A purchase closed on October 22, 2026 reaches six months on April 22, 2027 and 90 days on January 20, 2027 (our arithmetic); delayed financing is the only conventional route that can close before either date.
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Delayed financing on investment property: agency rules, LTV limits, price adjustments and lender-published cash-out terms
Fannie Mae and Freddie Mac delayed financing requirements, Eligibility Matrix limits, the cash-out and investment-property price-adjustment grid with totals, reserve and financed-property rules, three lenders' published cash-out terms and 16 worked maximum-loan examples. One source per row.
What the exception says, and how Freddie Mac differs
A conventional cash-out loan normally needs at least one borrower on title for six months. Fannie Mae’s guide lists the exceptions to that wait, and one is for a buyer who paid cash: borrowers “who purchased the subject property within the past six months” are eligible for a cash-out refinance if every requirement in its list is met. The two agencies write the list differently.
Delayed financing, Fannie Mae against Freddie Mac
| Requirement | Fannie Mae (Selling Guide B2-1.3-03, 12/10/2025) | Freddie Mac (Guide 4301.5, effective 02/04/2026) |
|---|---|---|
| Window | Purchase within the past six months, measured from the purchase date to the disbursement date of the new loan | Applies when no borrower has been on title for six months before the note date |
| Proof the purchase had no loan | A settlement statement that “confirms that no mortgage financing was used to obtain the subject property”; a recorded trustee's deed may substitute | The settlement or closing disclosure must reflect that no financing secured by the subject property was used; a recorded trustee's deed may substitute |
| Title | Preliminary title search or report confirms no existing liens | Preliminary title report shows the borrower as owner and no liens |
| Source of purchase funds | Documented, for example bank statements, personal loan documents or a HELOC on another property | Fully documented |
| If the money was borrowed elsewhere | All cash-out proceeds must pay off or pay down that loan; remaining payments count in the debt-to-income ratio | Cash-out proceeds pay off or pay down the borrowed funds; additional cash-out only when all borrowed funds are paid in full |
| Gift funds | Gifts used to buy may not be reimbursed with the new loan | Loan amount is reduced by any gift funds used to buy |
| Cap on the new loan | “the actual documented amount of the borrower's initial investment in purchasing the property plus the financing of closing costs, prepaid fees, and points on the new mortgage loan”, within the maximum LTV on current appraised value | “the sum of the original purchase price and related Closing Costs” from the purchase statement, “less any gift funds used to purchase the subject property” |
| Buyer and seller | Original purchase must be an arms-length transaction | No affiliation or relationship between buyer and seller |
| Who may have bought | Natural person, revocable trust (borrower is settlor and beneficiary), land trust (borrower is beneficiary), or an LLC or partnership the borrower owns 100%, individually or jointly | Not stated on the page we saved |
| Pricing | “Cash-out pricing is applicable” | Has its own Credit Fees section; amounts not on the page we saved |
Two differences matter in practice. Fannie Mae’s cap is what you actually put in, which can be below the price if a gift paid part of it; Freddie Mac’s is the price plus the closing costs on the purchase statement, less gifts. And only Fannie Mae’s text lists the entity types that count as the original buyer. On title held in an LLC, both agencies’ ownership rules say the property has to move into the borrower’s own name to close (Fannie Mae B2-1.3-03, Ownership of the Property; Freddie Mac 4301.5(b), on or before the note date); ask the lender how that applies to a property an LLC bought. Our conventional loan page covers the rest of the agency rules for a rental.
The cap that binds is 75% of value, not what you paid
Most descriptions of delayed financing say the investor “gets the purchase money back.” On an investment property the loan-to-value limit usually stops that. Fannie Mae’s own sentence applies both limits: the loan is the documented investment plus financed costs, “subject to the maximum LTV, CLTV, and HCLTV ratios for the cash-out transaction based on the current appraised value.”
Fannie Mae maximum LTV, CLTV and HCLTV, Desktop Underwriter loans (Eligibility Matrix, August 5, 2026)
| Property and transaction | Units | Maximum |
|---|---|---|
| Investment property, cash-out refinance | 1 unit | 75% |
| Investment property, cash-out refinance | 2-4 units | 70% |
| Investment property, limited cash-out (rate-and-term) refinance | 1-4 units | 75% |
| Investment property, purchase | 1 unit | 85% |
| Investment property, purchase | 2-4 units | 75% |
| Principal residence, cash-out refinance | 1 unit | 80% |
| Principal residence, cash-out refinance | 2-4 units | 75% |
A buyer who used no loan put in 100% of the price, and the lender will give back at most 75% of the appraisal (70% on two to four units), so the unrecovered part is the gap between those. The table below tests 16 combinations of price and appraisal for a one-unit property; we assumed purchase closing costs of 2% of the price, and the figures are before the financed costs of the new loan.
Maximum new loan on a one-unit investment property after a cash purchase (our arithmetic)
| Price paid | Appraised value | 75% of appraisal | Price plus 2% costs | Maximum new loan | Capital left in the property | Which limit binds |
|---|---|---|---|---|---|---|
| $150,000 | $150,000 | $112,500 | $153,000 | $112,500 | $40,500 | 75% of appraisal |
| $150,000 | $165,000 | $123,750 | $153,000 | $123,750 | $29,250 | 75% of appraisal |
| $150,000 | $187,500 | $140,625 | $153,000 | $140,625 | $12,375 | 75% of appraisal |
| $150,000 | $210,000 | $157,500 | $153,000 | $153,000 | $0 | Purchase price plus costs |
| $250,000 | $250,000 | $187,500 | $255,000 | $187,500 | $67,500 | 75% of appraisal |
| $250,000 | $275,000 | $206,250 | $255,000 | $206,250 | $48,750 | 75% of appraisal |
| $250,000 | $312,500 | $234,375 | $255,000 | $234,375 | $20,625 | 75% of appraisal |
| $250,000 | $350,000 | $262,500 | $255,000 | $255,000 | $0 | Purchase price plus costs |
| $400,000 | $400,000 | $300,000 | $408,000 | $300,000 | $108,000 | 75% of appraisal |
| $400,000 | $440,000 | $330,000 | $408,000 | $330,000 | $78,000 | 75% of appraisal |
| $400,000 | $500,000 | $375,000 | $408,000 | $375,000 | $33,000 | 75% of appraisal |
| $400,000 | $560,000 | $420,000 | $408,000 | $408,000 | $0 | Purchase price plus costs |
| $600,000 | $600,000 | $450,000 | $612,000 | $450,000 | $162,000 | 75% of appraisal |
| $600,000 | $660,000 | $495,000 | $612,000 | $495,000 | $117,000 | 75% of appraisal |
| $600,000 | $750,000 | $562,500 | $612,000 | $562,500 | $49,500 | 75% of appraisal |
| $600,000 | $840,000 | $630,000 | $612,000 | $612,000 | $0 | Purchase price plus costs |
Three readings (our arithmetic). With an appraisal equal to the price, 25% of the price plus the closing costs stays in the property: $81,000 on a $300,000 purchase. The purchase-money cap becomes the lower number only when 75% of the appraisal exceeds the price plus costs, which for one unit means an appraisal more than about 36% above the price (1.02 divided by 0.75); in the grid it bound at an appraisal 40% above the price and nowhere else. For two to four units the limit is 70%, so a $500,000 purchase appraised at $500,000 supports at most $350,000 and leaves $160,000 of the $510,000 invested.
Worked example 1: a straightforward cash purchase (our arithmetic). Price $300,000, purchase closing costs $6,000 (2% assumed), appraisal $330,000, one unit. Seventy-five percent of the appraisal is $247,500; the purchase-money cap is $306,000 plus the financed costs of the new loan; the lower figure is $247,500. Capital left in the property: $306,000 minus $247,500 = $58,500.
Worked example 2: a cheap buy that appraises high (our arithmetic). Price $200,000, costs $4,000, appraisal $300,000. Seventy-five percent of the appraisal is $225,000. The purchase-money cap is $204,000 plus the new loan’s financed costs; if those are $6,000 (an assumption), the cap is $210,000. Delayed financing returns $210,000. After six months on title, the ordinary cash-out rules have no cap tied to the purchase, and the same loan could be $225,000, $15,000 more. The crossover appraisal is $204,000 divided by 0.75, $272,000.
What it costs: the price-adjustment grid
“Cash-out pricing is applicable,” Fannie Mae’s guide says of delayed financing. Fannie Mae charges loan-level price adjustments (LLPAs) as a percentage of the loan, cumulative. On a cash-out refinance of an investment property, two apply at the same time: the credit-score and loan-to-value grid for cash-out refinances, and the additional adjustment for an investment property. The investment-property adjustments in the LLPA Matrix of September 30, 2026 are 1.125% at LTVs up to 60%, 1.625% from 60.01% to 70%, and 2.125% from 70.01% to 75%. The sum below is our arithmetic on those two cells; a two- to four-unit property adds another 0.375% from 60.01% to 75%.
Total Fannie Mae LLPA on a one-unit investment-property cash-out refinance, by credit score and LTV (LLPA Matrix of September 30, 2026; our arithmetic)
| Credit score | LTV 30.00% or less | LTV 30.01% to 60.00% | LTV 60.01% to 70.00% | LTV 70.01% to 75.00% |
|---|---|---|---|---|
| 780 or more | 1.500% | 1.500% | 2.250% | 3.000% |
| 760-779 | 1.500% | 1.500% | 2.500% | 3.375% |
| 740-759 | 1.500% | 1.500% | 2.625% | 3.750% |
| 720-739 | 1.500% | 1.625% | 3.000% | 4.125% |
| 700-719 | 1.500% | 1.625% | 3.250% | 4.750% |
| 680-699 | 1.500% | 1.750% | 3.625% | 5.000% |
| 660-679 | 1.500% | 2.000% | 4.375% | 6.125% |
| 640-659 | 1.500% | 2.500% | 4.750% | 6.750% |
| 639 or less | 1.500% | 2.500% | 5.000% | 7.000% |
A borrower in the 70.01% to 75.00% band with a 740 to 759 score pays 3.750%: $3,750 for every $100,000 borrowed, or $9,281 on the $247,500 loan in example 1. At 700 to 719 the total in that band is 4.750%; at 660 to 679, 6.125%. Because delayed financing has to be a cash-out, a lower leverage band is the only lever: at 60.01% to 70% the 740 to 759 total drops to 2.625%. The LLPAs are what Fannie Mae charges the lender; how the lender passes them on, in the rate or in points, is in the quote. The grid applies to loans sold to Fannie Mae, not to the non-agency loans below.
Which route gets cash out of a paid-for rental
Routes for an investor who bought a rental without a loan (rules as published; lender terms are claims)
| Route | Earliest cash-out on a purchase closed October 22, 2026 | Limit on the new loan | What the source says |
|---|---|---|---|
| Fannie Mae delayed financing | At once, if the documents are in order | Lower of the documented investment plus financed costs and 75% (one unit) or 70% (two to four) of the appraisal | Selling Guide B2-1.3-03; Eligibility Matrix, August 5, 2026 |
| Freddie Mac delayed financing | At once, if the documents are in order | Purchase price plus closing costs, less gifts; its LTV limits are not on the page we saved | Guide 4301.5, effective February 4, 2026 |
| Conventional cash-out after six months | April 22, 2027 | 75% (one unit) or 70% (two to four) of the appraisal; no cap tied to the purchase price | Selling Guide B2-1.3-03; Eligibility Matrix |
| Kiavi rental loan | On a free-and-clear property, per its website; otherwise January 20, 2027 (90 days) | “Up to 80% LTV” on rental loans; no separate cash-out limit on the page | kiavi.com/rental, read October 22, 2026 |
| Lima One rental loan | January 20, 2027 (90 days) for full market value | “Up to 75% LTV on cash out”; 70% on its short-term rental program | limaone.com/rental, read October 22, 2026 |
| Visio Lending | No clock on the page we saved | No LTV figure on that page; minimum credit score 680 and six months of reserves | visiolending.com/lending-process, saved October 7, 2026 |
Kiavi’s page puts the free-and-clear case in the same sentence as seasoning: “Pull cash out of a property you own, after 90 days or immediately on Kiavi bridge loans or when free and clear.” A property bought without a loan is free and clear until the new loan, so on Kiavi’s published wording a cash buyer is the case where it names no wait. We cannot tell from the page what value Kiavi uses in that case, how it treats the purchase price, or what it charges; the term sheet does. Lima One’s page promises “leverage on the full market value of the property in just 90 days,” a wording based on value rather than on the price paid. These are lender websites, saved October 22, 2026 (Visio’s October 7, 2026), and they change; the lender’s written guideline governs.
A home equity line on another property is the other quick source and is covered in our HELOC on investment property page. Our cash-out refinance page has the 2025 federal record for investor cash-outs (rates, loan-to-value, denials) and our DSCR refinance guide works through prepayment penalties and seasoning on the non-agency side.
Who qualifies: reserves and the count of financed properties
An agency delayed-financing loan is still a conventional loan, so the borrower’s file is underwritten. These Selling Guide rules change who can use it again and again.
Fannie Mae limits for an investor taking cash out of a rental
| Rule | Fannie Mae | Source |
|---|---|---|
| Maximum financed properties, second home or investment property | 10 in Desktop Underwriter | Selling Guide B2-2-03 (11/05/2025) |
| Minimum reserves in DU on an investment-property transaction | Six months | Selling Guide B3-4.1-01 |
| Extra reserves for other financed properties | 2% of their aggregate unpaid balance for one to four, 4% for five to six, 6% for seven to ten (DU only) | Selling Guide B3-4.1-01 |
| A property bought with no loan | Not financed, so not counted until the new loan closes; the new loan then makes it financed | Our reading of B2-2-03 |
The last row is our reading, not a quote: B2-2-03 counts the one- to four-unit properties on which the borrower is personally obligated on a mortgage. An investor with a portfolio who buys for cash and then refinances adds a financed property each time, which is why the count and the reserve percentages matter for repeat use.
What a reader can do with this
- Decide whether the wait costs you anything. If the appraisal will come in near the price, delayed financing and a cash-out after six months return the same amount, 75% of the appraisal on one unit; the only thing the exception buys is the months. If you are buying well under value, compare the two: example 2 shows $15,000 less under delayed financing.
- Do the cap arithmetic before you offer. Appraisal times 0.75 (0.70 on two to four units) against price plus costs. Whatever is lower, less the new loan’s costs and price adjustment, is your cash.
- Buy with a clean file. Fannie Mae needs a settlement statement that shows no financing, a title report with no liens, a documented trail of the funds and an arms-length seller. A loan from a friend secured by the property, or a seller who is a relative, is a different case; ask the lender before closing.
- Keep the money trail simple. If the cash came from a HELOC on another property, the proceeds first pay that line down; gifts cannot be reimbursed.
- Get the quote with the price adjustment in it. The grid above is the lender’s cost; the quote is what you pay. Moving from 75% to 70% LTV lowers the 740 to 759 total from 3.750% to 2.625%.
- Compare a lender that does not underwrite you. If the agency file, reserves or financed-property count is a problem, the DSCR lenders above publish 90-day or free-and-clear cash-out; their terms are in the term sheet.
Kiavi pays us a referral fee when a loan closes through its button in the box below; Lima One and Visio pay us nothing. All three make closed-end investor loans, and the pages we saved are the source for what they say about limits and seasoning. This page does not tell you which loan to take.
Update alert · free
An email when the fannie mae delayed financing rules numbers change
When a rate, rule or filing behind this page changes: what changed, the one number that matters, and the source to check it yourself.
What this page cannot see
- Rules change. The Eligibility Matrix is dated August 5, 2026 and the LLPA Matrix September 30, 2026; Fannie Mae reissues them, and the Selling Guide topic we used is the version of December 10, 2025.
- Lender websites are claims. Kiavi, Lima One and Visio publish marketing pages. None states fees, points or a prepayment schedule on the pages we saved.
- No count of delayed-financing loans. We did not find a public source that flags them, so this page has rules and arithmetic, not a volume.
- Freddie Mac’s limits. The page we saved for Guide 4301.5 covers the delayed-financing conditions; its maximum LTV for an investment-property cash-out is in another chapter we did not save.
- Our examples assume costs. We used 2% purchase closing costs and a $6,000 financed cost on the new loan; yours will differ.
FAQ
Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions (12/10/2025), B2-1.3-02, B2-2-03 (11/05/2025) and B3-4.1-01, selling-guide.fanniemae.com, read October 22, 2026; Fannie Mae Eligibility Matrix dated August 5, 2026 and Loan-Level Price Adjustment Matrix dated 09.30.2026, fanniemae.com, downloaded October 22, 2026; Freddie Mac Single-Family Seller/Servicer Guide section 4301.5 (effective 02/04/2026), guide.freddiemac.com, page text read October 7, 2026; Kiavi (kiavi.com/rental) and Lima One (limaone.com/rental) pages read October 22, 2026; Visio Lending (visiolending.com/lending-process) page saved October 7, 2026. This is analysis of public documents, not investment, legal or tax advice.
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