Fannie Mae?

I’m interested in purchasing and short selling a property, its foreclosed and owned by Fannie Mae. This is my first foreclosure handled by Fannie Mae so I was just going over the special addendums and I came across this, read exactly off the contract-

Grantee herein shall be prohibited from conveying captioned property to a bonafide purchaser for value for a sales price of greater than $ 120% for a period of 6 months(s) from the date of this deed. Grantee shall also be prohibited from encumbering subject property with a security interest in the principal amount of great than $ =120% for a period of 6 months(s) from the date of the deed. These restrictions shall run with the land and are not personal to grantee.

I was planning on getting the work done in a maximum time frame of two months and putting it back on the market, hopefully selling before six months. Rehabbed the property will sell for far greater than 120 percent so obviously that’s a problem. The contract doesn’t say anything about lease to own option, or balloon mortgaging so I wanted to see if anyone has had any experience with that or how much it will deter a interested buyer.

Lease/Option - The optionee can usually exercise their option anytime (specific to the contract). So, theoretically, they can exercise their option (i.e., buy the property) within 6 months. Just something to think about.

Balloon Mortgaging - Not sure what this is exactly. Do you mean owner financing? Or contract for deed? If owner financing, a sale has transpired, thereby, triggering the clause. Contract for deed should be okay, tho.

By a Balloon Mortgage I mean-

Having the buyer put down a percentage similar to 60% at closing; then the remaining 40 percent due in six months.

Anyways I went over the addendum again and I think it has a loophole with the way it’s worded. I’m not going to say anything but if anyone else picks it up I would love to compare. I’m going over to my attorney’s office tomorrow to see if in fact it is a loophole.

Caution: This is a Federal organization/program…the “anyone” that would pick it up will have the FBI investigate…is it worth the risk because you believe that you’ve found a ‘loophole’ in the wording…caution my friend


Do you know someone who will put 60% down without getting the deed?