Problem with Comps in the Appraisal

[Aaron Levinson]

We are under contract to buy our first rental property, a duplex. We had financing lined up and got an appraisal done. The property appraised over the purchase price but the lender is dragging their feet on whether the property would be approved for a fixed term loan at the agreed terms since they weren't confident the comps used would meet the standard required by Fannie Mae. I've submitted additional potential comps to the lender but there aren't that many duplexes recently sold in the neighborhood of the property. No final decision has been made yet and the lender has said they'd offer a adjustable mortgage instead of the fixed mortgage, but my concern with using an adjustable that I might have trouble refinancing in future because of the same issue. Has anyone else come across this problem before and how did you handle it?