What’s the Policy on buying a Fannie Mae Home as a Living Trust?

August 12, 2011 at 1:33 pm Leave a comment

by: Maria Hass

A question came up during a transaction I was handling for a recent client who was purchasing a Fannie Mae property as a primary residence. My client wanted to initiate an amendment to change their names, as owners, to a “Family Living Trust” prior to closing. Would Fannie Mae allow a “Family Living Trust” as the named buyers for a primary residence? Fannie Mae responded by saying, “We only allow natural persons to be owner-occupants. If the buyer changes to a Trust they would have to cancel and resubmit as an investor buyer. They would not be eligible during any First Look period nor would they or their agent be eligible for any owner-occupant promotions.” Obviously, my client decided to leave things as they were, with their actual names as “natural persons” to receive the 3.5 percent buyers’ closing cost assistance and to retain the $1,200 agent bonus for owner-occupant buyers.
My understanding therefore is, buying a Fannie Mae home as a “Living Trust” is only acceptable for investment properties not with owner-occupant/primary residents.
Lastly, when dealing with REO properties, two major rules come to mind: 1. The lender rules. 2. Buyer beware. The property is sold as-is without repairs.

Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate. Tags: , .

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