The Delayed Purchase Program (also referred to as the Delayed Finance Program) is a unique program that you might not have heard about before. So what exactly is it and how does it work? The benefits might surprise you.
How it Works
In most any real estate market, when a seller sees an all-cash offer, it typically gets moved up to the head of the line. As long of course as the offer is acceptable to the seller. When buyers seek out a mortgage loan, the approval process can take up to 30 days in many cases. Buyers can shorten this time frame up a bit by getting their application in and obtain a preapproval. I can get this process started for you. Sellers want to see that an offer is accompanied by a pre-approval letter showing the buyers are not only serious about buying but the only thing they need is a property.
Still, there are occasions when a property comes up unexpectedly and in a competitive real estate market, an all-cash offer will typically get the nod. Even if other offers are a bit more than the cash buyer. Sellers don’t have to worry whether or not the deal will close. If it doesn’t, for whatever reason, they must list the house all over again.
Benefits to the Delayed Purchase Program
From the buyer’s side however, making a cash offer can leave more than a dent in a savings account. When the perfect home comes up for sale and the home is a “perfect fit” buyers can reach into a cash or retirement account quickly. But once they do, those funds are no longer working for them in a retirement account or mutual fund. Historically, buyers must wait for at least six months before taking out a cash-out loan against the equity in the home to replace the funds used to buy the home. But our new Delayed Purchase Program solves all that with a very competitive solution. Homeowners no longer have to wait to get back their cash. Buyers can also take out very short-term loans to buy a property but the loan must be repaid soon after closing and face a similar situation as an all-cash purchase.
Properties That Qualify
The Delayed Purchase Program addresses this very issue and there is no seasoning requirement that restricts the owners from accessing the equity in the property for six months or more. Equity can be tapped into replacing cash used or to pay off interim financing as long as the loan is taken out within 90 days of the original closing. Regarding value, the original purchase price applies as it relates to value and the loan amounts can be as high as 7.5 million. This program can be used to finance a primary residence, a second or vacation home, a rental property or a 2-4 unit property.
The borrowers in this program must provide a copy of the final closing statement when they first purchased the property as well as provide copies of the various accounts used to make the all-cash transaction. The Delayed Purchase Program isn’t used very often but when it is it’s the perfect solution. I have the loan details available but if you’ve been told you have to wait to get your money back, I can help.