Fannie Mae Now Prohibitting Purchases by all Licensees of Listing Broker

[Mark Ferguson]

For those of you who are Realtors 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.

[Mark Ferguson]

Ryan M. Like Bill said HUDs gola is to provide affordable housing to owner occupied buyers. All HUD homes are FHA loans that went through foreclosure. FHA is the ultimate aid to get owner occupants into houses.

Max Williams, HUD feels listing brokers have an inside knoweldge of the HUD process and could greatly benefit from being able to buy HUD homes. I would love to be able to buy HUD homes, but that's the way it goes. The bid period on uninsured HUD homes is only 5 days long for owner occupied buyers. iInvestors can bid on the 6th day and HUD will review those bids the next day. Technically there is only a one day bid period for investors, same with FHA insured HUD homes. They have 30 day owner occupant bid period, but when investors are allowed to bid HUD will review bids the next day. There is a definit advantage for investors who know to bid the next day.

Here's a link to my Investors Guide to Buying HUD Homes on BP with tons of info on HUD process. http://www.biggerpockets.com/forums/517/topics/85710-investors-guide-to-purchasing-hud-homes

Personally I feel this policy makes more sense for Fannie Mae than it does HUD. With Fannie Mae the listing broker has a lot more influence on submitting offers and intereactions with the buyers agent. With HUD's bid process it is almost impossble for the listing agent to interfer with the offer/bid process.