Can You Fix-n-Flip a Fannie Mae Homepath Property?

[Wendell De Guzman]

I have a question for you smart ones of Biggerpockets.

Fannie Mae has this program called Homepath.

They're selling CHEAP but the main issue is they impose a DEED RESTRICTION so much so that you are NOT ALLOWED to sell the house within 12 months of purchase. 

One solution we have around this issue is RENT TO OWN - buy the house, fix it and then sell it rent to own. It will take 12-18 months for the title to transfer since the tenant/buyer will take about that time for him or her to qualify for a mortgage.

However, today, I encountered a Homepath house that is ideal for FIX-N-FLIP. My sweet spot for rent to own in my market is the ARV range of $150K to $250K. Above $250K, I get less tenant/buyers but more buyers. The house I am looking at right now has an ARV of $450K but I can get it cheap - only $250K (it needs about $20K repairs).

I know and have heard of selling the LLC but this really does not work for end buyers who need a traditional mortgage.

I am stumped.

Any creative work around this deed restriction of Fannie Mae Homepath?

Thanks in advance BP Nation!

[Greg H.]

@Wendell De Guzman

The deed restriction for investor purchases is only 90 days where you cannot sell the property for more than 120% of the purchase price during that period.  The 1 year restriction is for owner occupants only