Delayed Financing in San Diego: How Your Cash-Buyer Clients Get Their Money Back Out

Every fall I get the same call from a CPA, usually in the second week of September, usually about a client who did something smart and slightly terrifying: they wired cash for a house.

It worked. In a San Diego market where a clean, non-contingent offer still moves a seller more than another $20,000 does, cash wins. But now the client is sitting on an unlevered house and an empty brokerage account, the Q3 estimated payment is due September 15, and somebody has to explain how the money comes back out.

That mechanism has a name — delayed financing — and it is one of the few places where the loan calendar and the tax calendar collide hard enough to matter. This is the version I wish more CPAs had in front of them before the client buys, not after.

Who this is for

You are a CPA, EA, or fiduciary advisor with a San Diego client who:

• bought a primary residence, second home, or investment property with no mortgage, using cash, a brokerage liquidation, a margin loan, a HELOC on another property, or a short-term bridge from a family entity;
• always intended to finance it, and treated the cash close as a bidding tactic; and
• now wants the liquidity back — for a tax bill, a business, a second purchase, or simply because a concentrated position in one house is not a plan.

If the client bought with a mortgage already in place, this is not the tool. That is an ordinary cash-out refinance, with ordinary seasoning rules.

How the loan side actually works

Under the agency delayed financing exception, a borrower who purchased a property for cash can be treated as a cash-out refinance borrower right away rather than waiting six months from the purchase date. The conditions are mechanical, which is good news — mechanical means you can check them in advance.

Requirement	What it means in practice
Arm’s-length purchase	A gift, an inheritance, or a transfer between related parties does not qualify. The client has to have actually bought it.
No existing mortgage on the property	The purchase itself must have been unencumbered. Financing on a different property is fine — see the next row.
Source of funds documented	Bank statements, brokerage statements, the wire. If any of the purchase money came from borrowing — a HELOC on the old house, a margin loan, a business line — that borrowing generally has to be repaid out of the new loan proceeds.
Settlement statement	The CD or ALTA statement from the purchase drives the math. Keep it. Clients throw these away constantly.
Loan amount cap	Generally the lesser of (a) the original purchase price plus documented closing costs, points, and prepaids, or (b) the standard cash-out limits applied to the current appraised value. Current agency guidelines commonly cap a one-unit primary residence cash-out at 80% LTV, with lower limits for second homes and investment property.
Title	If the property went into an LLC or a trust at close, the vesting has to be worked out before application, not during underwriting.

Notice what the cap does: it returns the client’s basis in cash, not their appreciation. A client who bought a $1.4M house for cash in June and watched it appraise at $1.5M in September does not get to pull $1.2M out. They get back up to what they put in, subject to LTV. That is usually exactly what they wanted, but it is worth saying out loud before anyone builds a plan around a bigger number.

The 90-day clock — the part that belongs on your calendar, not mine

Here is where the two calendars collide.

The loan world cares about the six-month seasoning rule. The tax world does not care about seasoning at all — it cares about tracing. Under the interest tracing rules, what makes mortgage interest deductible as home acquisition interest is what the borrowed money was used for, not what the loan happens to be secured by.

IRS Publication 936 provides that a mortgage taken out within 90 days after the home is purchased may be treated as having been used to buy the home, up to the amount of the purchase price the taxpayer paid within the 90 days before the loan. Outside that window, the analysis is different, and the client may be looking at debt that is secured by the residence but not characterized as acquisition indebtedness.

I am not going to tell you how to run that analysis — that is your work, and the facts drive it. What I can tell you is that the 90 days runs from the purchase, and a refinance takes 21 to 30 days on a clean file. Which means the practical deadline for starting the loan is roughly day 55 to day 60 after close, not day 89. Clients who call me on day 80 are already in a bad spot, and it is a bad spot that was completely avoidable.

If you have a client who is even thinking about a cash close this fall, the single most valuable thing you can do is put a 55-day tickler on the purchase date. It costs nothing and it preserves an option that expires quietly.

This is the same category of problem as the timelines in a 1031 exchange: the tax result is decided by a calendar, and the financing has to be started early enough to land inside it.

The September 15 overlap

The reason this comes up now, every year, is the Q3 estimated payment.

A client who sold appreciated stock in Q2 or Q3 to fund a cash purchase has a realized gain with no withholding attached to it. The house absorbed the cash. The estimate is due September 15. And the most liquid asset the client owns is now a residence with no lien on it.

Delayed financing is often the cleanest bridge between those two facts — assuming somebody started it in time. When it is not started in time, the alternatives are all worse: a HELOC at a variable rate, a margin call risk, or an underpayment penalty the client will absolutely remember at filing.

Rates are relevant here but they are not the driver. The Freddie Mac Primary Mortgage Market Survey for September 3, 2026 put the 30-year fixed at 6.71%, up from 6.66% the prior week, with the 15-year at 6.04%. A year ago the 30-year averaged 6.50%. Those are national averages, not offers, and no individual file is priced off them. The point is simply that 6.71% money against a house is a different instrument than an underpayment penalty or a forced sale of a concentrated position, and the comparison a client should be running is that one — not “is 6.71% a good rate.”

When to skip it

I would rather lose the loan than watch a client do this for the wrong reason. Delayed financing is the wrong call when:

• The client genuinely does not need the liquidity. An unlevered primary residence is a legitimate position for someone in or near retirement. Do not manufacture a reason to lever it.
• The property was inherited or gifted. It does not qualify, and no amount of documentation changes that.
• The client is past the tax window and the interest character matters to them. Sometimes the honest answer is that the cheap version of this expired and the remaining options need to be priced accordingly.
• The client’s income has changed since the purchase. A cash purchase requires no income documentation. A refinance does. Self-employed clients in particular can buy with cash on a strong balance sheet and then run into an income picture that looks nothing like the balance sheet — which is its own conversation about qualifying income, and worth having before the wire goes out.
• The purchase money came from a source that cannot be documented. Undocumented funds are a hard stop, not a hurdle.

What I need from you to move fast

When a CPA sends me one of these, the file moves in days instead of weeks if the client shows up with:

1. the purchase settlement statement (CD or ALTA);
2. the two months of statements showing where the purchase funds came from;
3. the closing date, in writing, so we can count the 90 days together;
4. the payoff details on anything that was borrowed to fund the purchase; and
5. the current vesting on title.

That is the whole list. Everything else is normal underwriting.

Frequently asked questions

Does delayed financing require a different loan program?

No. It is a cash-out refinance that is permitted to skip the seasoning requirement because the purchase was unencumbered. Pricing follows standard cash-out pricing, which typically carries an adjustment relative to a rate-and-term refinance.

Can the client take out more than they paid?

Generally not under the delayed financing exception — the cap is tied to the documented purchase price plus closing costs. A client who wants to access appreciation is usually looking at waiting out the standard seasoning period and doing a conventional cash-out afterward.

Does this work on investment property?

The exception exists for primary residences, second homes, and investment properties, but the LTV limits and pricing differ meaningfully by occupancy, and investment property caps are lower. Run the specific property before the client builds a plan on it.

What if the client bought in an LLC?

It can usually be worked out, but it has to be worked out early — vesting changes take time and the 90-day tax window does not pause for them.

Is 6.71% a good time to do this?

That is the wrong question. The right question is what the client’s alternative cost of liquidity is. Compare the loan to the actual alternatives — not to a rate they remember from 2021.

---

Ron Berg is a mortgage advisor with The Berg Group, powered by C2 Financial Corporation, working with San Diego buyers, homeowners, and the CPAs and advisors who refer them. He writes about the mechanics of the loan side so the people advising on the tax side are not guessing.

Ron Berg · NMLS #974839 · C2 Financial Corporation, NMLS #135622 · Equal Housing Opportunity. Rates cited are national averages published by the Freddie Mac Primary Mortgage Market Survey and are not offers, quotes, or commitments to lend. All loans are subject to underwriting review, and terms may vary by borrower, property, and program. This article is educational and is not tax or legal advice — taxpayers should rely on their own CPA or tax advisor for the treatment of any specific transaction.