Fannie Mae Title Transfer to Partnership LLC

[Scott Minton]

I've been scouring the forums for hours trying to find a post that gives me an answer different from what I'm finding. But I haven't seen this exact topic discussed, so here goes. My brother and I formed a 50/50 Partnership LLC. We plan on buying a few homes, renovating and renting them. We found our first house and we used my brother's credit to buy it. The loan is a Conventional Fannie Mae loan, which we specifically asked for because the title can be transferred into an LLC without triggering a due on sale clause. However, I didn't read this sentence (or at least had a different understanding of what it meant, if I did) "the LLC is controlled by the original borrower or the original borrower owns a majority interest in the LLC". The bank is stating that since my brother is only a 50/50 partner, he does not own a majority interest in the LLC. That's true.

Has anyone had luck arguing that technically both partners have a controlling interest or found any other mechanism to be able to transfer title into the LLC? Is the bank correct in its statement and we need to figure out how to refinance into the LLC?

Thanks, in advance, for your suggestions.

Scott