Cash-out refinance of a free & clear property after purchasing it with cash:
Within six (6) months of purchase: Program Reference 02-23-12 [FNMA Delayed Financing Exception] 1a
The source of funds used to initially purchase the home must be fully documented. This can be money from another sale, a personal loan, inheritance, etc... It just has to be sourced and seasoned. Cash from a tin can or mattress is not acceptable.
The new loan amount can not exceed the actual documented amount of the borrower's investment, plus the financing of closing costs, prepaid fees, and points - subject to the standard maximum LTV/CLTV/HCLTV for cash out transactions.
The purchase transaction must have been an arms-length transaction.
All other cash out refinance eligibility requirements must be met and cash out refinance pricing applies.
Special guidelines apply if the borrower owns 5-10 financed properties.
Within six (6) to tweleve (12) months of purchase: