Fannie Mae REOs can be a great source for investors. They have a lot of inventory and offer great financing options through Homepath. Fannie Mae just made it more difficult for agents who are investors. Fannie Mae now prohibits purchases by all licensees of listing brokers. Check out my complete guide on investing in long term rental properties for more information on financing rentals, where to find them and my strategy.
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For those of you who are Realtors and like to also buy investments, this is HUGE news! HUD has a policy that the listing broker for HUD, any licensees under that broker and their close relatives cannot buy a HUD home, no matter who has it listed. Fannie Mae just announced a similar policy. This is the wording directly from Fannie Mae:
“Effective immediately, for any property assigned to a Broker, Fannie Mae will now prohibit the purchase by the listing Broker, Listing Agent, and any licensees affiliated with the Broker, even if located in a different office under the Broker’s control. Also prohibited is the sale to a close relative of the Listing Broker, Listing Agent, and any licensees affiliated with the Broker. A “close relative” is defined as a spouse, domestic parter, or child under the age of 18, or any relative who shares the same residence.
Should the Listing broker or any licensee of the Broker have an interest in purchasing a Fannie Mae REO listed with another company, the buyer/agent must indicate that relationship in Section 38 of the Real Estate Purchase Addendum. The agent receiving the offer must then communicate the agent’s status in the offer comments when submitting the offer into the system. The buyer type for this purchaser is Licensed Agent. A Listing Broker may be an investor or an owner occupant so the occupancy intent must be stated in the offer comments. “
Basically if you area a Realtor and your office lists Fannie Mae properties, no agent in your office or their immediate family can purchase a Fannie Mae home listed by anyone in your office. This rule is slightly different from HUD’s rule which states you cannot by any HUD home period if you are an agent, or immediate family of an agent in an office that lists HUD homes.