Is mortgage interest on a delayed financing mortgage or a cash-out refinancing on a primary residence deductible?

[PaulaM · Accepted solution]

It can be deductible if it the mortgage was done with 90 days of the purchase date.

From IRS pub 936 - Mortgage treated as used to buy, build, or improve home.

 - A mortgage secured by a qualified home may be treated as home acquisition debt, even if you do not actually use the proceeds to buy, build, or substantially improve the home. This applies in the following situations.

1. You buy your home within 90 days before or after the date you take out the mortgage. The home acquisition debt is limited to the home's cost, plus the cost of any substantial improvements.

https://www.irs.gov/publications/p936#en_US_2016_publink1000229989

[etkeefe1918]

Will the 90-day IRS rule remain in effect for tax years 2018-2025 following the passage of the new tax bill?

[PaulaM]

So far, it looks like the 2018 changes to mortgage interest deduction has to do with the lower $750,000 of debt (instead of $1 million). Changes if any, would be updated in the IRS pub 936.

[Sammy1]

Thanks, are there other requirements beyond the 90 day / max being purchase price + improvements? Any requirements on LTV, for instance? I understand banks may have LTV requirements but is there anything mandated by IRS to qualify for delayed financing?